Temporary and Agency Workers (Equal Treatment) Bill

Order for Second Reading read.

Andrew Miller: I beg to move, That the Bill be now read a Second time.
	I thank the many people who have contacted me regarding the Bill and the huge the number of colleagues who have expressed their support for the measure. The media have already noticed that my sponsors reflect all strands of opinion inside the parliamentary Labour party, and because of that I am confident that the Government will listen to my comments as I know that I speak for so many colleagues.
	I do not want to dwell on why no progress has been made, but want to provide an opportunity for the House and the Government to start to resolve one of the most important employment issues that we have had to address since the implementation of the minimum wage.

Christopher Chope: I attended a meeting on Wednesday with, among others, the Institute of Directors. It informed me that it has been assured by the Government that they are against the Bill. Is that the hon. Gentleman's understanding as well?

Andrew Miller: It is my understanding that the Government are in favour of resolving the problem, and that is what I want to happen. I am not particularly worried whether it happens through the vehicle of this Bill or this Bill amended, or by some other measure. I, and the many people supporting the Bill, want the issue resolved, and soon.

Alun Michael: Is it my hon. Friend's impression, as it is mine, that the same bureaucratic forces deep in Whitehall are against the Bill as were originally against the Gangmasters (Licensing) Bill? Does he agree that what is required is for Ministers to put down their collective foot and ensure that fairness is provided for agency workers?

Andrew Miller: My right hon. Friend speaks with authority given his responsibility in taking that Bill through the House. A solution that might wake up some civil servants is to put agency staff in Whitehall. They might think a bit differently then.
	I remind the House that the stories of doom and disaster that we have heard from some quarters are based on precisely the same arguments as we heard when we introduced the minimum wage—threats that 250,000 jobs will be lost and threats about the slow-down of the economy. We face the same doom merchants, recycling the same speeches. They were wrong then and they are wrong now. My Bill, if introduced with care, will not impact at all on our competitiveness.
	I want to consider the substance of my right hon. Friend the Prime Minister's interview in Davos on 25 January this year, when he said:
	"You've got to look at what the skills you can offer are. If you are unemployable because you've got no skills...we will give you help to get the skills. If you're a young person, we want to get you on to an apprenticeship or a junior apprenticeship. If you're an adult, we want to get you basic skills that you may never have had before."
	He went on to say:
	"The next stage is skills."
	He was trying to develop a vision for what he saw as the 2020 economy, in which the 6 million unskilled jobs in the British economy are replaced by a much smaller number of jobs. He then said:
	"The rest have got to be skilled. If you don't get the skills, you'll not get a job."
	That is precisely right. It is a very good analysis of what the economy needs and what British workers need to do to help us to get the economy moving in the right direction in the race for the top. It is that model that we should be targeting, not a model that is based on exploiting workers at the bottom end of the pile. If Britain, and indeed Europe, intend to compete in that race, that will undoubtedly be based on a highly skilled and highly motivated work force.
	Although temporary workers will continue to be needed to fill the peaks in demand and to help us to deal with unexpected circumstances, the notion that the number will remain the same as today's figure of approximately 1.4 million runs contrary to any logic. We simply cannot achieve the goals set out by the Prime Minister without addressing the issue that we are dealing with today. Doing nothing provides a short-term advantage to some businesses, but it does little to provide the necessary ingredients for us to reach that 2020 goal. After all, few agencies have any clear training objectives. So my first argument in favour of the Bill is that it is in the best long-term interests of the economy to encourage employers to plan for the long term and to establish a well-trained and well-motivated work force.
	The second argument, which has brought so many of my colleagues together, is that what the Bill proposes is morally right, which is surely the basis on which we should legislate. At the end of the day, that should be a powerful motivator, and it should be central to our thinking in Parliament. How can it be right for people to work alongside one another with the same skills doing the precisely the same task, yet one category of employee is worth less than another? The concept of equal value should surely apply to anyone in such circumstances. I am not arguing that there is no need to use agency workers, as they create the flexibility that is sometimes needed, but I am arguing that they should not be routinely used as a means of dodging the cost of sick pay, holiday pay, pensions and any other part of the package available to permanent employees.

Bill Olner: Like many of my colleagues, I am interested in the substance of my hon. Friend's speech and the Bill. Does he agree that the Opposition Benches are quite bare? There are no Liberals in the Chamber and very few Tories.  [ Interruption. ]

Andrew Miller: The sole Liberal, the hon. Member for Solihull (Lorely Burt), has returned to the Chamber.
	As usual, my hon. Friend has made an astute observation about what happens in the House. It is fascinating that Labour Members, who represent working people, have turned out en masse to support the measure, while the Opposition Benches are devoid of Members.

Michael Weir: The Scottish National party would hate to be left out of this little discussion. I can assure the hon. Gentleman that there is support among nationalist Members for his Bill, and we will support him today.

Andrew Miller: I am glad of support from the token nationalist in the Chamber. I wonder whether the rest of them will participate later in the vote.
	I should like to illustrate my argument with a few cases. An agency approached me with irrefutable evidence of wrongdoing by another agency, which was providing labour below the minimum wage. While better policing of existing legislation would help, we need to fire a shot across the bows of offenders, and I want action by Ministers to address the problem. That is slightly outside the parameters of the Bill, but it is important that we look at the issue holistically, and ensure that the abuses that have been identified are properly addressed by using existing legislation as well as incorporating the proposals that I have set out. In the case that I have just raised, the agency was undercut on two occasions by a competitor and, consequently, it could not bid for the work because to do so would be illegal. Yet someone is doing that work, which is outrageous in this day and age. Under existing policing arrangements, it was impossible to deal with the problem.

Mark Pritchard: In trying to be helpful to the hon. Gentleman may I give him another example to illustrate the need for his proposals? Next Friday, the Department for Work and Pensions, which is run by a Labour Minister, will announce whether, with Capgemini, it will lay off 600 to 700 people in my constituency, only for them to be replaced by agency workers who do not have the rights that he believes they should have.

Andrew Miller: I genuinely look forward to the hon. Gentleman's support in the Division.

Nigel Evans: I am extremely grateful to the hon. Gentleman, and I congratulate him on the incredible turnout of support, which will send a signal to the Government about what the parliamentary Labour party wants. He is a fair man, so will he tell us what the total cost will be to British industry if his Bill becomes an Act?

Andrew Miller: I do not believe it will be a cost—I think it will be a benefit, because the measure will result in a greater focus on the need to upskill workers in modern industry, thus helping us to move towards the economic model that the Prime Minister postulated in his Davos speech. I remind the hon. Gentleman that precisely the same issue of cost was raised by Opposition Members when we introduced the minimum wage. That measure has not resulted in detrimental costs for the UK, and the Bill will not do so, either.

Colin Challen: Is not one of the benefits for British industry the fact that the morale of people in permanent employment will be boosted by the knowledge that they will not be replaced, or threatened by, the advance of temporary and agency workers? That will surely impact on their capacity to perform their functions to the best of their abilities.

Andrew Miller: My hon. Friend makes an extremely important point. The confidence and morale of the work force in any workplace impacts directly on productivity and, indeed, the profitability of the business. That point is blindingly obvious, but it has been missed by Opposition Members. My hon. Friend has hit on a very important matter: if Britain is to be competitive in the race to the top, we must build greater confidence among the work force by getting employers to work with permanent staff. I accept that they have to use temporary and agency workers when absolutely necessary to deal with peaks in demand and emergencies, but they should use their core work force more productively. I thank my hon. Friend for his intervention.

Lindsay Hoyle: I congratulate my hon. Friend on introducing the Bill. Will he go a bit further, and confirm that the measure will help to protect employees' terms and conditions, which will benefit not just agency workers but people in full-time jobs?

Andrew Miller: Again, my hon. Friend is absolutely right. We have identified examples in which the bringing in of agency workers, predominantly from central European countries, has not only undermined conditions but damaged good relations in the workplace, which is an unhealthy development. Employers argue that they are trying to achieve more flexibility in the workplace, but they act against their own best interests.

Stephen Ladyman: I congratulate my hon. Friend on introducing his Bill. He just made a point about people being brought in from far away, which is happening even in prominent high street supermarkets. The lower wages that those workers are paid are used as a benchmark to try to adjust the wages of permanent staff.

Andrew Miller: Again, my hon. Friend makes a sensible point.

Several hon. Members: rose —

Andrew Miller: I should like to make a little progress.
	Two gentlemen came to my surgery asking for advice about how they could claim redundancy pay, because the depot in which they worked in my constituency had closed. The closure appeared to be a perfectly rational business decision, so when those guys came to see me I asked them why claiming redundancy pay was a problem. They told me that they were employed by an agency. I was curious, and asked them how long they had worked for it. One said, "Twelve years", and the other one said, "Eight years." Is that a good use of British workers? It is an outrage that a publicly known company—Calor—should act in that way.

Jim Cunningham: Does my hon. Friend agree that, while agency workers work for low wages on bad terms and conditions the people who run those agencies make profits, which is a very expensive way to go about things?

Andrew Miller: It is an expensive way of addressing employment needs. These so-called permatemps are an unacceptable form of employment.
	Viktor, a Hungarian whom I met a couple of weeks ago—colleagues will know that I have a strong connection with that country as chair of the all-party group—is sleeping on the floor of a house with five other young men who are being exploited in Britain in 2008. His problems need addressing through my proposals and through the Gangmasters (Licensing) Act 2004 introduced by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan), whom I congratulate on that.
	Many other examples of abuse can be cited, but I want to deal now with the Bill and the two issues that have historically been a stumbling block in progressing the matter. First, with regard to the qualifying period, some jobs require no training and a permanent employee would be taken on at the particular rate for the job. There can be no argument but that temporary employees in such employment should earn the same as their permanent counterpart from day one. Other jobs require particular qualifications or experience, where the responsibility of the temporary employee is the same as that of the permanent employee, and, again, they should be paid the same. For example, if a temporary replacement for a staff nurse with 10 years' experience is required, it is fairly straightforward to work out the fair rate for such work from the trust's pay scales.

Phyllis Starkey: Will my hon. Friend expand his point to deal with gender equality issues? He will be well aware that one of the ways in which gender inequality in wages can arise is when certain jobs are predominantly done by women. Such jobs often appear to be graded at a lower level, and if they are more temporised, there is further inequality.

Andrew Miller: My hon. Friend is spot on, and I thank her for that observation.
	The tougher area might be the semi-skilled workers where the particular nature of the work requires a ramping up to the appropriate rate. Why make things complicated? Why should not the same principle apply for temporary and agency workers?

Mark Pritchard: Will the hon. Gentleman give way?

Andrew Miller: No, I shall not give way. I am just coming to a conclusion.
	The other stumbling block has been on the issue of enforcement. I do not want an industrial tribunal to be the first line of defence. That should be the last resort, used only in extremis. I want the Minister to consider the space that I have allowed him in clause 4 to create a mechanism that is short, sharp and effective, and avoids the overuse of tribunals. He should consider creating that responsibility, perhaps in ACAS, unless somebody comes up with a better idea.
	In the long term, the Bill is economically the right thing to do, and, for the reasons that I have described, it is morally the right thing to do, and I commend it to the House.

Mr. Deputy Speaker: The Question is, That the Bill be now read a Second time.

Hon. Members: Aye.

Mr. Deputy Speaker: I call Charles Hendry.

Dennis Skinner: On a point of order, Mr. Deputy Speaker. It will have been within the hearing of most hon. Members, especially on the Labour Benches, that there were many Ayes but no Noes, so should a Division have been called?

Mr. Deputy Speaker: The Opposition spokesman rose rather late, but he clearly had every intention of participating in the debate.

Charles Hendry: I am grateful to you, Mr. Deputy Speaker. Many of us will have been slightly surprised to see so many people here ardently and enthusiastically supporting the Bill, but not one of them seeking to rise in order to speak in support of it. Moreover, the House will have wanted me to speak now to ensure that the Minister has a chance to say what he thinks about the Bill, because we know clearly from what has been said elsewhere that while it has much support on the Back Benches, it is fundamentally opposed by the Government.
	The Opposition oppose the Bill because it is unnecessary and misguided. In March 2006, the Government published a consultation paper entitled "Success at Work. Protecting vulnerable workers, supporting good employers". In it the Government commented on agency workers as follows:
	"Having reviewed the evidence provided in responses to the consultation and taken account of action already undertaken since 1997, we believe changes to the legal framework would not prevent instances of abuse or lack of awareness. It could, however, damage labour market flexibility and result in the reduction in overall employment. We have concluded that the present legal framework reflects the wide diversity of working arrangements and the different levels of responsibility and rights in different employment relationships. The Government believes that it meets the labour market's current needs and there is no need for further legislation in this area."
	That statement was made because, as was noted, a balance between temporary and agency workers' rights and the employer's business needs had been struck. Temporary employment provides flexibility to employers and thus benefits businesses. Temporary agency workers benefit from many of the minimum rights introduced since 1997. They are covered by the minimum wage, working time legislation, and health and safety and social security provisions, such as maternity and sick pay. Legislation has already been changed to ensure that part-time workers have the same rights in relation to pay, access to pensions and bonuses. They are also protected from discrimination. As for the workers' opinions, according to YouGov, 53 per cent. of temporary workers felt that they were treated fairly by their agency and 24 per cent. neither agreed nor disagreed.
	The business position was also broadly in agreement. The Engineering Employers Federation said:
	"UK manufacturing competes successfully in a global market. Part of the reason for this success is the UK's comparatively flexible labour market. A vital element of that flexibility is the agency workers market which enables companies to respond to fluctuations in demand as they occur."
	It would seem that the situation was broadly satisfactory to Government, to business and to most of the workers concerned—that is, until the EU brought out yet another proposal, which aims yet again to level down employment legislation to the lowest common denominator.
	The Conservative party has consistently supported the Government in resisting the European Council draft directive on agency workers since May 2000. During the discussions in the Council on 5 December 2007, the Portuguese presidency suggested that the temporary workers directive should be discussed together with the proposals to amend the working time directive 2003/88/EC, which would prohibit the UK's opt-out from the general limit of 48 hours on the working week. I shall not discuss this in detail today, but it would clearly have serious implications in the UK.
	Instead, I quote from an article in the  Financial Times, dated November 2007, which reported on the run-up to the December 2007 meeting of the European Council. It stated:
	"The government is adamantly opposed to any such deal, backing employers' concerns that the temporary workers measure would damage the UK's flexible labour market. 'Our position hasn't changed...we don't think the temporary workers measure as it stands strikes the right balance,' the Department for Business, Enterprise and Regulatory Reform said."
	But now, out of the blue, it would seem that the Government are to create an independent commission to consider the rights of agency and temporary workers. Can the Minister explain to the House where that proposal came from and why? Whenever the Government wish to indulge their passion for dithering and sitting on the fence, they launch another commission. In this case, they want to say yes to the unions and their Back Benchers, but dare not for fear of upsetting business; but they also want to say yes to business, but dare not for fear of upsetting the unions and their Back Benchers.

Dari Taylor: Is the hon. Gentleman making a different statement from that of the CBI? On Radio 4 this morning, it made the clear statement that it was prepared to sit on a temporary workers commission, as it had sat on a low-pay commission, to see this Bill put into action? Is he taking a very different line from the CBI?

Charles Hendry: That must be a different interview from the interview I heard with the CBI this morning, in which it explained that it was fundamentally opposed to the Bill. It did say that it would take part in commissions when the Government asked it to do so, but it sees that as part of its duty as an employers organisation, rather than a duty it should take on because it supports what the Bill is about.

Philip Davies: Further to that point, does my hon. Friend agree that the CBI has also said that the Bill as it currently stands could lead to 250,000 job losses in this country?

Charles Hendry: My hon. Friend is absolutely right. It was noticeable that, when the hon. Member for Ellesmere Port and Neston (Andrew Miller) introduced the Bill, which he did with his normal sincerity and commitment, and was asked about the costs to business, there were groans from the Labour Benches, as if the costs to business did not matter. On these issues, a balance must be struck between the interests of employers and employees to ensure that our economy remains strong.
	In this case, the Government are ignoring their own position, as stated in their response to the 2007 European Commission Green Paper. Question 10 of the Green Paper asked:
	"is there a need to clarify the employment status of temporary agency workers?"
	The Department of Trade and Industry, as it then was, responded that
	"we see no need to further clarify the employment status of temporary agency workers."
	The DTI went on to explain that the
	"thriving agency and temporary work sector"
	is fine as it is. None the less, the Government now produce the idea of a commission.
	I therefore hope that the Minister will take this opportunity to tell the House, rather than talking to the media, what the commission will do and who will be on it. For example, although I assume that it will look to see how temporary workers could be given pay and conditions comparable with those of permanent workers, will it also be charged with looking at making their positions identical, and will it be instructed to review whether that is in itself a desirable objective? Frankly, our concern here is that the commission is going to be asked to review not only the mechanical issues but the economic and political issues that the Government are so desperate to avoid in their rush to another policy fudge.
	Back on the European Union front, it is our understanding that France is expected to push on the issue when it takes over the EU presidency on 1 July. Indeed, it is said that France is likely to revive the proposed EU directive, which could suggest that rights to equal treatment begin after just six days in employment. We also believe that the continued support of Poland and Germany will be crucial to Britain, but I note that the  Financial Times reports that
	"a Polish spokeswoman recently said that Warsaw was looking at the Portuguese proposal, and wanted to reach an agreement on both directives."
	In other words, if there were ever a time for the Government not to dither, but to remain firm, it is now. Therefore, we simply do not understand how the proposed commission ties in with the EU agenda. In particular, can the Minister now urgently confirm that the commission will report before the decision has been taken by the EU?

Christopher Chope: Does my hon. Friend think that there is an extraordinary inconsistency in the Government's approach, because this Bill goes much further than the proposed directive, yet the Government were trying to get allies to block the directive a few months ago? Now it seems as though they think that that directive will be all right.

Charles Hendry: My hon. Friend seems surprised that there may be an extraordinary inconsistency in the Government's approach. We have learnt that there is always an extraordinary inconsistency in their approach. They will say different things on different occasions.
	We also want to know whether the reality is that the commission is just another fudge by a weak and vacillating Government who are dithering on one matter after the next. I have some sympathy for the Minister. He was in the papers just a few weeks ago saying that he has the most difficult job in government, closing down post offices all over the country, upsetting all his own Back benchers and everyone else. Today he has to come to the House to explain to those same Back Benchers why he is blocking the Bill as well. However, we need some clarity from him on the issue.

Mark Pritchard: Does my hon. Friend agree that—I suspect that this is to the slight embarrassment of those on the Government Front Bench, given that the Minister is a west midlands MP—all over the country, and in particular in the west midlands, the Government are laying off highly qualified permanent staff and replacing them with very expensive temporary, often inexperienced, staff in the public sector?

Charles Hendry: The Government have many issues to address on that front. Considering the general level of competence that one sometimes finds on these issues, perhaps we should be replacing some of the Ministers with temporary staff. That might improve the way in which the country is run.
	To make matters worse, even union leaders are sceptical and want clear terms of reference before agreeing to a commission. Of course, they are open to saying that they do not want a commission—they want this Bill. Therefore, it seems that the unions have rejected the commission before it has even started. The Government are not leading here, they are simply treading water, hoping that the issue will go away.
	To show how this Bill is unnecessary, let me go back to the fundamental issues. There are 1.4 million agency and temporary workers in the United Kingdom. According to the Department:
	"In the UK some 94 per cent of the workforce works under traditional contracts, with less than 6 per cent on temporary contracts. However, temporary work, such as agency work, is greatly valued by employers and many individuals. We have a thriving agency and temporary work sector that is a key part of our economy and in which many choose to work for positive reasons."
	Those are the words of the Department for Business, Enterprise and Regulatory Reform. The CBI confirms that, stating:
	"Agency workers value the opportunity to work on a flexible basis around other commitments, such as students during vacation or those with caring responsibilities. Others choose temping as a long term career and like the freedom, flexibility and high pay. Up to half of agency workers are not seeking a permanent job. Industry surveys show around half (52%) of agency workers choose temping for positive reasons such as increased flexibility, better pay or to gain valuable work experience and a fifth (20%) use temporary work as a route into a permanent job."
	For those seeking a permanent job, agency work is a route to employment for young people, for those who have been out of work for a long time, perhaps due to long-term illness, or time in prison, and for mothers returning to work. It enables businesses to take on inexperienced staff as agency workers, thus giving those people invaluable work experience. That removes the "no job without experience and no experience without a job" trap.
	For the employer, temporary workers do not just fill a need in private businesses. According to the Federation of Small Businesses, many Government Departments also rely on temporary workers to fulfil a specific short-term need. In 2006, the Department for Work and Pensions estimated that it had 120 agency staff. Between 2005 and 2006, the Department of Health spent £12 million on employing agency staff. In 2006, to meet the single farm payment scheme, 53 per cent. of the staff working in that area in the Department for Environment, Food and Rural Affairs were agency workers. In the case of small businesses, the FSB notes that temporary workers may help to meet big orders while a business is growing but cannot sustain an extra member of staff long term. Temporary workers also help to cover sickness leave, which is a far greater problem in a small team of people. In short, temporary workers help businesses to get by and to grow.
	Let us not forget the tidal wave of Labour employment legislation, which has forced companies bogged down in red tape to rely on agencies to sort out additional administration. The extension of maternity leave in particular will mean that businesses must take on temporary workers for up to 12 months from 2009. [Hon. Members: "Hooray!"] The CBI anticipates that that will lead to a greater number of women taking a longer period of maternity leave. Labour Members cheer but they must look at the full range of consequences. It will be important that firms are able to cover that absence with temporary workers. However, if the Bill were to go through, a small business might find itself paying for maternity leave for a temporary worker who was covering for a permanent employee who was on maternity leave as well.

Philip Davies: Does my hon. Friend agree that the jeering on the Labour Benches reflects the fact that many Labour Members have no idea about anything to do with wealth creation, running a business, ever employing anyone or trying to make a profit? Lots of Labour Members, despite being well meaning, live in a parallel universe to that inhabited by most businesses that are trying to create some wealth in this country.

Charles Hendry: I commend my hon. Friend for that observation. It was striking that in introducing the Bill, the hon. Member for Ellesmere Port and Neston said that it would create wealth and jobs. It is intriguing that not a single business has lined up to say that. The people whose job it is to create businesses, wealth and employment do not happen to believe that. Indeed, the harsh reality is that the Bill could increase discrimination against women being employed and create impossible situations for small businesses.
	Of course, the cost of agency work needs to be taken into account. It is often more expensive than direct employment because employers pay a fee to the agency, which covers not only wages but agency costs. This is one reason why equal pay between agency temps and permanent employees cannot always be justified.

David Marshall: So that we can all be perfectly clear where the hon. Gentleman and his party stand on the question of fair pay and conditions for all workers, will he tell the House whether he intends to vote against the Bill today?

Charles Hendry: We will most certainly vote against it today—we have made that position clear.

Dennis Skinner: You didn't make a very good job of it.

Charles Hendry: I point out to the hon. Gentleman that I started off by saying that we oppose the Bill, which we believe to be unnecessary and misguided, so in my very opening sentence I explained that we would oppose it today.
	Another reason why equal pay between agency temps and permanent employees cannot always be justified is that many agency workers get a higher rate of pay than they would in permanent roles. This is the case for skilled craftsmen and IT and accountancy temporary workers. The Association of Technology Staffing Companies has explained to us that highly skilled IT contractors do not want to be treated on a basis equal to their peers within the companies in which they are placed. They are recruited on the basis that they have a specialist skill that no comparable worker in the organisation has, and they are paid accordingly.
	Some agency workers do receive pay equal to that of permanent staff, but not other benefits. Indeed, benefits such as workplace pension schemes, occupational sick pay or occupational maternity pay are often not appropriate for temporary workers as they are part of the package given by employers to reward loyalty and long service. In some areas, agency workers are paid less than permanent workers because the experience and commitment that they wish to provide are not equivalent to that required of permanent, experienced staff. Temporary workers may have the same level of qualification, but that does not necessarily mean that they have the same ability or inclination to do the same job as experienced staff who know how the firm works.
	The Bill does nothing to improve the relationship between employers and temporary workers. Instead, it creates a grey area. It does not specify which rights and conditions are comparable between a permanent worker and a temporary worker. In particular, there is a profound lack of clarity in clause 1 regarding when an employer can lawfully pay an agency worker less than a comparable direct worker. Would it be "justified on objective grounds", as the Bill says, to pay an agency worker less than a direct worker, and how are the agency and client to know without a tribunal ruling? When would the provision apply? The Bill does not even specify whether the employer is allowed to take into account the experience of temporary workers when fixing the salary. Would it be justified, therefore, to pay the agency worker less for a probationary period while they learn the job? What if the agency worker is providing cover for an absent worker who is still receiving pay, including maternity or sick pay? Can this also be taken into account?
	This Bill creates a complex and confusing regulatory regime for agency work. That would lead to high compliance costs for good employers, but it would fail to tackle those who already disregard employment rights. The CBI has said that the additional work required to take on an agency temp or to end an assignment could lead firms to use other methods, such as overtime, to meet demand, significantly reducing the number of assignments offered. Many multinationals cite labour market flexibility as the main reason why they choose to invest and to create jobs, permanent and temporary, in the UK. They have told the CBI that such a move would affect future inward investment decisions. Indeed, as my hon. Friend the Member for Shipley (Philip Davies) noted, the CBI said that 250,000 jobs could be lost as a result of the Bill.
	The hon. Member for Ellesmere Port and Neston has referred in the past to exploitation being one of the issues behind the Bill. Yes, some workers in this country are being exploited, although they are just as likely to be directly employed as they are to be agency workers. Frequently, existing legislation is not being enforced, but that is a different issue from the Bill before us. For example, the CBI is working with the Government and unions through the ministerial vulnerable workers forum to tackle non-compliance and improve enforcement. It is the interest of agencies, temporary workers and employers that temporary workers are protected from abuse. Improving collaboration between the various inspectorates should also be a top priority.

Philip Davies: My hon. Friend moved on rather quickly from clause 1, and I want to bring him back somewhat. Does he agree that the lack of clarity regarding the "objective grounds" and exemptions from the Bill means that even those who might be in favour of its thrust should recognise that it is so badly drafted and poorly defined, and would leave so many employers in limbo—not knowing what they could and could not do—that it is not worthy of being made law?

Charles Hendry: My hon. Friend is absolutely right: the Bill is fundamentally flawed not only in its approach, but in what it seeks to achieve. Hopefully, the Minister can reassure the House regarding the amendments that will be sought in Committee, should the Bill be granted its Second Reading today.
	It may be accepted that a reasonable qualifying period should allow for equal treatment with a user firm's staff, but even permanent staff do not receive full employment rights until they have completed a probation period. There is no overall agreement on this issue, although the CBI believes that a period of 12 months would be appropriate; this is on a par with other time-related employment rights such as protection against unfair dismissal.

Ken Purchase: What do they know?

Charles Hendry: In so many of these issues, one finds a fundamental hostility to business and wealth creation. If we want to keep this country as a place where businesses will invest and create the jobs that will create wealth, we must have a partnership, rather than constantly undermine the work of those who create the wealth.

Richard Younger-Ross: The hon. Gentleman talks about the need for temporary workers to deal with workplace fluctuations. He has just conceded that the CBI accepts that after 12 months, workers' rights can be in place. Does he therefore agree that the case that we heard of earlier, involving a temporary worker who was in place for six to eight years, is wrong? Should not such a worker have full employment rights, equal with the other workers in the workplace?

Charles Hendry: I am reluctant to criticise or praise a particular company until I know the circumstances, but the situation in question certainly seems surprising. At the same time and as we have discussed, what suits some individual employees does not necessarily suit others. Some people choose to work for longer periods, although that does not appear to have been the case in the example outlined by the hon. Member for Ellesmere Port and Neston. Nevertheless, every situation is going to be different, which is why a blunt instrument such as the Bill is not the right way forward. There is no overall agreement on when full rights should come into play. Within the EU, countries such as Germany adopt a similar approach in relation to some of the companies here, while others pay agency temps at a special trainee rate.
	I do not think that I have said much today that the Minister will disagree with. The question remains, however, as to why the Government are suddenly looking for compromise, and why have more than 100 Labour MPs signed the early-day motion supporting this Bill, given that the Government have made it clear that they are not keen on it? Of course, the answer, I am afraid, is the growing power of the unions within Labour and their demand to call in their Warwick agreement pledges. Will the Minister confirm or deny the report in  The Guardian that union leaders met Labour MPs at Westminster on 18 February to underline that they "expect" Labour Back Benchers to stay in London today to ensure that this Bill receives a Second Reading? The reality is that this is a prime example of the trade unions exploiting their new leverage. They have donated £55 million to the Labour party since 2001 and now represent almost 75 per cent. of the party's annual income.
	Since 1997, this Government have introduced 18 Acts and more than 289 statutory instruments that deal directly with employment. The impact has been to increase the complexity and burdens faced by employers, while strengthening both trade union and employee rights. The new and disturbing development is that now, the Government could be setting the ground to renege on their firm position of supporting agency working and what they have acknowledged as being in the best interests of the British economy.

Christopher Chope: I am, in a sense, disappointed that my hon. Friend is about to conclude his remarks, when there are so many important criticisms to be made of the Bill. Does he have any idea how many of the 1.4 million temporary workers are members of unions? Does he see that as the core of the issue?

Charles Hendry: I do not have that statistic, but 77 per cent. of temporary workers, according to the survey, were not unhappy with the current situation. It is a lesson that many of the people whom the Bill addresses do not see the need for it.

Christopher Chope: My hon. Friend dealt briefly with the bureaucracy involved in the Bill and its comparability. Does he recognise the big difference between the labour market in the United Kingdom, where most contracts of employment are between individuals, and that in many countries in the rest of Europe, where contracts of employment are on a collective basis? The juxtaposition of clauses 1 and 2 would therefore create a bureaucratic nightmare.

Charles Hendry: My hon. Friend is absolutely right. That is one of the reasons why the issue should not be addressed through the European directive, which tries to bring together fundamentally different approaches to employment in different countries. I hope that the Government will continue to resist moves to amend the directive in that way.
	We will oppose the Bill today, because its concept, and particularly its approach to achieving its purpose, is flawed. The Minister now has an opportunity to clarify the Government's position and to stop saying one thing to one audience, and something else to another.

Patrick McFadden: I congratulate my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) on raising the issue of temporary and agency workers through his Bill. I appreciate his deep and genuine concern to protect the vulnerable at work and to ensure fairness for all workers whether they are permanent or agency workers. The Government share that concern and I shall set out our position.
	The Bill sets out a series of rules under which agency work—work carried out by working through an agency established to supply labour to a number of different hiring firms or organisations—should be conducted. As my hon. Friend said, the Bill is motivated by a desire to protect vulnerable workers and to combat mistreatment at work.
	We all know that there are people who are vulnerable or mistreated at work. The Government are committed to protecting people in those circumstances, whether they are permanent employees or temporary or agency workers. Just as some permanent employees feel themselves poorly paid and treated, so do some agency workers. Together with the National Association of Citizens Advice Bureaux, my Department recently commissioned a survey of those who had inquired at citizens advice bureaux around the country about employment rights issues. The survey was perhaps not scientific, as it was a self-selecting sample of those who had turned up at citizens advice bureaux. Nevertheless, it showed that 95 per cent. of complaints came from permanent employees and just 2 per cent. from agency workers. Therefore, vulnerability and mistreatment are issues, but it would be wrong to equate agency work with exploitation and permanent work with an absence of exploitation.

Nigel Evans: John Cridland, the CBI deputy director-general, has said in a press release:
	"Any firms that do mistreat their temporary staff are breaking existing rules and deserve to be hauled over the coals. This type of abuse demands more effective enforcement, not a raft of new laws".
	Is that the Government's position?

Patrick McFadden: I certainly agree that, where breaches of existing law take place, the existing law should be enforced. It is one of the features of the debate that some of the abuses raised are breaches of existing law. I shall say more about that.
	Looking at the labour market as a whole, things are significantly better for people at work in the UK than a decade ago. Employment is up, with more than 29 million people in work, and the UK enjoys the highest employment rate in the G7. Unemployment is down and wages have increased by some 51 per cent. over the past decade. Workers in the UK also enjoy better rights, many of which extend to agency workers, including rights to the minimum wage, coverage by discrimination legislation, working time legislation, and statutory maternity, adoption and paternity pay. The Labour Government have not, through improvements that we have made, somehow created a situation in which employment cannot grow in the UK. In the past decade, unlike what happened under the Conservative Government, we have had growth in employment and an improvement in standards for people at work.

Philip Davies: I was delighted that, in response to my hon. Friend the Member for Ribble Valley (Mr. Evans), the Minister agreed with the CBI. Does he also agree with the CBI that the Bill as it stands could lead to 250,000 job losses?

Patrick McFadden: That is the CBI's figure, not the Government's. I shall deal with the detail of the Bill shortly.
	The debate has naturally concentrated on mistreatment at work. The UK has a higher proportion of its work force in permanent work than many other countries. Indeed, the UK has the second highest proportion of work force in permanent work in the European Union. Analysis from Eurostat also shows that the UK has significantly fewer people than many other EU countries working in the so-called informal economy, beyond the reach of employment law and protection.
	As we have heard, agency work is a relatively small but important part of our labour market. It allows both public and private sector employers to fill gaps in demand and deal with seasonal variation and cover for leave or long-term illness, and it generally adds to the flexibility with which the economy operates. It can be rewarding for many people and helpful to companies.
	Mistreatment can happen in a variety of circumstances, not just with agency work. Research carried out by King's college, London showed that on issues such as well-being, general health and positive attitudes towards work, agency and temporary workers were certainly no worse off and in some cases felt more positively than their permanent counterparts. In terms of the overall labour market picture, the Work Foundation, in a report published last year, said that the position of UK workers had improved over the past decade, in stark contrast to the decade that preceded it.
	None of that is to deny that there are occasions when there is mistreatment at work or that there should be a debate on the rights of temporary and agency workers, but it is useful to put the debate in the context of the overall UK labour market. A cornerstone of the success of the UK labour market over the past 10 years is that we have combined the flexibility that both workers and employers seek with improved conditions for people at work.

Nigel Evans: We are talking about the mistreatment of workers being against the current law. For instance, it would be against the law for anybody to be paid less than the minimum wage. As long as both employer and employee know what the minimum wage is, action can be taken. Does the Minister therefore believe that agency workers have a whole swathe of rights that they do not know about? Do the Government have a job of work to do to inform agency workers of their current rights?

Patrick McFadden: It is certainly true that all workers are entitled to the minimum wage. To reinforce that right, the Government have increased expenditure on minimum wage enforcement by some £3 million a year. If the hon. Gentleman is so minded, he can visit the minimum wage bus that is touring the country, stopping at 30 towns and cities to advertise that right, and the helpline that people can contact if they feel that they are not being paid the minimum wage.
	It is critical that we do not underestimate the importance of work and access to work to individuals, families and the country as a whole. It gives not just a financial reward but self-belief, a sense of purpose and a route out of poverty. It is therefore important to keep the barriers to work low and to help people to move from a world of inactivity to a world of activity, not only for the economy's good but for the good of individuals. Of course, the rationale for the Bill is not to deny the advantages of agency work, some of which my hon. Friend the Member for Ellesmere Port and Neston set out, but to offer protection for agency workers subject to mistreatment.
	The abuses mentioned in the debate often represent breaches of existing law. We have heard in recent days about people being asked to work machinery without safety guards and so on, which is a breach of the existing law and would not be covered by either the Bill or the draft European directive, which serves as the backdrop to the debate and focuses on pay. That was why we announced, through our 2006 policy statement, "Success at Work", that we would focus on vulnerable workers of all types and make a significant effort to ensure that the law as it stands is better enforced. We have made significant efforts to enforce the law on vulnerable workers, and I shall set some of those out.
	We have completely revised and updated regulations governing the British recruitment industry—the so-called conduct regulations, which came into force in April 2004. They have been amended to ensure new protections for agency workers, so that from April they will have a specific right to withdraw from services provided alongside the job, such as housing or transport, without any detriment to themselves. The regulations are enforced by an agency inspectorate in my Department, which is soon to be increased in numbers.
	We have also ensured that all workers, including agency workers, are covered by anti-discrimination laws and have core employment protections, including the minimum wage and the working time regulations, on the back of which we have recently increased access to paid annual leave. Perhaps it is worth reminding colleagues that the regulations governing rights to paid leave were top of the Opposition policy commission's hit list to abolish, should they ever find themselves in a position to do that.
	More broadly, we have taken forward the issue through the vulnerable workers enforcement forum, which I chair and which includes representatives from business, including agency employers, trade unions, citizens advice bureaux and enforcement agencies across Government. That body has been considering issues such as how to make it easier for people to report abuses and how to ensure better co-operation between the enforcement agencies. I stress those efforts because, whatever the merits or demerits of the Bill or the draft European directive, they would not tackle breaches of the current law. The answer to that is better enforcement, which we are determined to achieve.
	The minimum wage has been mentioned once or twice. Labour Members supported it because we wanted to put a floor under the labour market, beneath which no worker should fall.

Mark Pritchard: Does the Minister agree with the hon. Member for Ellesmere Port and Neston (Andrew Miller), who said that temporary workers should be given the same remuneration as permanent workers from day one?

Patrick McFadden: The Government's view has been that there should be a qualifying period before those rights apply. I shall come to that later.
	When we established the minimum wage, we wanted to develop a consensus about it among not just employees but employers. That was why we set up the Low Pay Commission—to recommend rates, after consulting both business and workplace representatives and taking into account wider economic factors. That model has been successful, and the minimum wage has not had the adverse consequences that the Opposition predicted. This year is no exception: the Government estimate that more than 1 million workers have benefited from the uprating last October.
	In this Session, we will also introduce our Employment Bill, which is intended to improve the effectiveness of dispute resolution in the workplace and of the application of employment law more widely. It will strengthen the enforcement framework for the national minimum wage, give workers better recourse to arrears if they are underpaid and stiffen penalties for the minority of employers who do not comply with the law and thereby undermine the efforts of legitimate employers.
	The Employment Bill will also give greater investigative powers to agency inspectors, increase the potential fines for breaching work regulations and reform the system of dispute resolution. That is all driven by a desire to have proper protections in the workplace while continuing policies that foster high employment and low barriers to entry to the job market.

Mark Pritchard: Will the Minister give way?

Patrick McFadden: I have given way to the hon. Gentleman a couple of times, so I shall proceed.
	As I have said, the Bill before us is prompted by a genuine concern about protecting agency workers who might be subject to abuse or mistreatment. The backdrop is the draft EU directive on agency workers, which has been discussed in the EU for some years. Much has been said about the Government's commitments and what we said before the last election, so I shall be clear with both sides of the House about what we said:
	"We recognise there are abuses of the system, for example 'permatemps' and agency workers who can find themselves in and out of completely casual work, not knowing from one morning to the next whether they will be earning anything.
	There are also questions about the status of some 'agencies' who work on the margins and exploit the vulnerable.
	Although many of these abuses would not be tackled by the current draft Agency Workers Directive, we support the principle of the Agency Workers Directive and will engage with the Commission with a view to reaching an early agreement on the proposed Directive."
	We did not say that we would sign any draft of the directive, regardless of its content, or reach an agreement that we did not believe would be in the interests of the UK labour market. Indeed, together with a number of other member states, we were unable to support the draft that was placed before the Employment Council in December.

Mark Pritchard: Will the Minister give way?

Patrick McFadden: I can detect that, even though the hon. Gentleman has moved, he has not transformed into someone else.

Ian McCartney: rose—

Patrick McFadden: I shall give way to my right hon. Friend.

Ian McCartney: I thank my hon. Friend for giving way. I had not intended to take part in the debate, but I remember well the words that he quoted, having written them at 4 o'clock in the morning as part of the Warwick agreement. It is certainly true, as he said, that there was no guarantee about the directive, which was deficient in many ways, including its lack of protection for pensions. However, we signed up in good faith with the intention that if we did not reach agreement, we would tackle those abuses. The fact that we have not done that so far has led to the Bill. I hope that after today, we will get some serious negotiation done, and that those words will become a reality for thousands of workers.

Patrick McFadden: I thank my right hon. Friend. Serious discussion of the issues is exactly what is merited. We want an agreement that protects and treats fairly agency workers, but does not lead to fewer people having the opportunity to work, or stifle the ability of business to be flexible in how it manages demand.
	We also want similar flexibility for our own labour market, as the directive would allow for labour markets with sets of institutions different from our own. That is an important point, and it is why the Government have engaged in discussions in recent weeks with both the unions and the CBI, with the aim of establishing a social partnership, akin in some ways to what we did on the minimum wage and the Low Pay Commission, to agree on some of the important details involved.
	The Government continue to support the principle of equal treatment, but there are specific issues to be addressed, some of which have been raised today. They include determining what qualifying period or periods would be appropriate, and how equal treatment should be calculated. For example, should an individual be compared with a worker who would have been hired that day in the same circumstances, or with someone who had been doing the job for years and who might have very different experience and qualifications from those of the agency worker?
	We have therefore proposed a process that brings together business and unions with an independent chairman to work through some of these issues. Although the parallel might not be exact—there are certain differences involved—the success of the Low Pay Commission demonstrates the strength of this approach in bringing durable, workable reform, so we have approached the CBI and the TUC to suggest an ad-hoc forum or commission, a body that would be tasked with making proposals concerning agency workers in the UK. That process would take account of the specific circumstances of the UK labour market and its institutions.
	The approach that I have set out offers a way forward on what has been a contentious issue. At this stage, the process has not been agreed by all the parties concerned, but the Government's point of view is that this is a constructive and positive suggestion to try to make progress in a way that offers greater protection while taking account of the specific conditions of the UK labour market, and that gives unions and business a voice in the outcome.
	I want to deal with some of the specific issues raised in the Bill and to register some of our concerns about its contents. As I have pointed out, agency workers are already protected by a combination of general legislation, which gives them core rights, and specific legislation governing the conduct of their agencies. The Bill, as drafted, is silent on the issue of a qualifying period, and we must therefore assume that it would give agency workers equal pay as compared with a permanent comparable worker on day one. It is not clear what that would mean, but it could lead to some companies deciding not to do the work, outsourcing it or asking their existing work force to work longer hours.
	The issue of a qualifying period is one that we would expect to be discussed by the proposed agency workers commission. It is important when taking forward the issue of equal treatment to do so in a way that does not result in the unintended consequence of creating barriers to entry into the labour market for people who may find agency work a valuable route back into employment.
	The Bill also appears to extend its coverage of agency workers to those placed by agencies in permanent posts. This goes beyond the draft EU directive, which applies only to temporary agency workers who have an ongoing relationship with the agency—for example, those who are paid by the agency and supplied to the hiring company. The Bill would take us into the field of regulating wages in mainstream permanent employment. Once an agency has placed a permanent employee in a company, the agency has no further contact and no further relationship with the worker. This is another issue about which we have concerns.
	The Bill also touches on the difficult issue of establishing what equal treatment really means in terms of who is being compared with whom. It seeks to address this in a number of ways, including through the creation of a hypothetical comparator. It does not use the comparator contained in the current draft of the agency workers directive, however. I acknowledge that this is a difficult and sensitive issue, in terms of achieving clarity and creating a mechanism for enforcement. This is another example of the kind of issue that the Government feel could usefully be worked through in the commission that we have proposed.
	The Bill suggests that, if there were "no real comparable direct worker", a "tribunal" could look at a wide range of circumstances to establish whether there was a hypothetical comparator. This needs careful examination, as it could encourage an increase in complex and costly litigation. Enforcement needs to be considered carefully, particularly when there is no readily available comparator, lest we establish a regime that proves over-complex and bureaucratic to operate.
	We have a very active agenda on the issue of preventing abuses at work.

Philip Davies: I asked the Minister earlier whether he agreed with the CBI's assessment that the Bill, as drafted, could lead to 250,000 job losses. He replied that that was the CBI's figure, not the Government's. I want to pin him down on this matter. Will he tell us what the Government's assessment is of the number of job losses that the Bill would cause?

Patrick McFadden: Whether or not such a regime would have an adverse effect on employment would depend on the issues that I have just mentioned. It would depend on how the comparators were measured, on what the qualifying period or periods might be, and on precisely how the regime would operate.
	On the wider agenda of preventing abuses at work, we are working closely with trade unions, business and the enforcement agencies. I appreciate the genuine concerns of my hon. Friend the Member for Ellesmere Port and Neston and the supporters of the Bill who are present today. However, given the Government's proposals that I have set out today on how we wish to take this issue forward, and our reservations about some of the specifics in the Bill, the Government cannot support it on Second Reading. However, we are happy to maintain a dialogue with my hon. Friend about these issues and we will not oppose his Bill at this stage. We will work actively to take forward the proposal for a commission on agency workers that I have outlined. We believe that that represents a positive way forward on what has been a difficult issue. I hope that hon. Members on both sides of the House will be united in the aims of stamping out abuse of vulnerable workers—whether directly employed or agency workers—maintaining opportunity and choice for employees to get work, and ensuring that the British economy remains flexible and successful, not just today but well into the future.

Lorely Burt: I preface my brief comments with two points. First, I apologise to the House because I cannot stay to the end of the debate. I have to leave early for a hospital appointment that I have already cancelled once because of parliamentary business. Secondly, I want to be brief because the second item of business—the Leasehold Reform Bill, which is to be presented by my hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes)—will be hugely important in strengthening the rights of leaseholders, and the Government have indicated that they might not oppose it.
	I have no argument with the intention of the Temporary and Agency Workers (Equal Treatment) Bill to protect vulnerable agency workers from being exploited by unscrupulous agencies. However, the Bill scoops all agency and temporary workers into the same net. Most agencies are reputable and care for their workers; otherwise, people would not continue to work for them. The net also scoops up professional contractors who use agencies and who are paid a premium to lend their expertise for a specific time. They could suffer a pay loss if the Bill were implemented. Indeed, my hon. Friend the Member for Teignbridge (Richard Younger-Ross) has expressed his fears about that. In his previous life, he worked as an architectural technician and he benefited from agency work and from receiving premium payments.
	Companies use agencies because they need flexibility to cope with fluctuations in demand. Six per cent. of the work force are temporary or agency workers, and the arrangements can suit them, too. The TUC reports that 50 per cent. of temporary and agency workers choose this form of working because it gives them flexibility. If we were to give agency workers the same rights as employees, we would kill this market stone dead because it would remove the reason why these workers exist. Also, if there were an economic downturn, as many people fear, a lack of flexibility to cope with changing business needs could spell the end of many more jobs than those of the temporary and agency workers alone.
	There are injustices in this market, and they must be tackled. Government statistics prove that, on average, temporary workers earn 23 per cent. less than the average for the whole work force, though that is due at least in part to the concentration of temporary workers at the unskilled end of the labour market. I feel particularly that it is not right that agency and temporary workers should be kept on contracts for long periods when they are really employees in all but name.
	The CBI, the Federation of Small Businesses, the Institute of Directors and the British Chambers of Commerce seem willing to help tackle the problem by considering the possibility of a period after which temporary or agency workers would be entitled to full equal rights, as outlined in the Bill. They seem to favour a period of 12 months, as it would tie in with other aspects of employment legislation. As we have heard, the CBI says that its members would sit on an agency workers commission. The commission appears to be a good way forward.
	In relation to unscrupulous agencies that flout existing law, the problem is a need not so much for new legislation as for enforcement of the legislation that we already have. How many new laws will it take before the Government realise that they will not stop bad behaviour just by making it illegal, but must increase the certainty of getting caught? I read recently that the average employer can expect an enforcement visit from a Government minimum wage inspector once every 287 years. The Minister's earlier assertion that the Government are enforcing the minimum wage looks hollow.

Patrick McFadden: Does the hon. Lady agree that the enforcement agencies should respond to complaints rather than touring the country inspecting by rota businesses where there may be no abuses at all? Her figures for how often a perfectly good employer can expect a visit do not imply the best use of the enforcement agencies' time. The agencies could be responding to complaints from people who say that they are not receiving the minimum wage.

Lorely Burt: I agree that the Government must investigate all complaints. However, it is far short of the mark to imply that companies that the Government have not investigated must be good employers. I appreciate that the Government have limited resources, but they should at least put the same effort into enforcing existing law as they do into creating new ones.

Richard Younger-Ross: Does my hon. Friend accept that temporary workers often lose out in industries such as construction, where companies short-cut health and safety regulations, and that the number of accidents on building sites is increasing in direct proportion to staff cuts at the Health and Safety Executive? In some cases, we need agencies to go around enforcing legislation, because if they do not, there will be more accidents at work.

Lorely Burt: I thank my hon. Friend for a valuable intervention. I agree totally.
	I spoke to the citizens advice bureaux yesterday. They would like the enforcement commission to enforce action on abuses of existing legislation, rather as Her Majesty's Revenue and Customs enforces the minimum wage. I am glad to hear from the Minister's remarks that the Government have been discussing enforcement with the CABs, and I hope that he will say whether the Government support an enforcement commission of that sort.
	Agency workers have contracts, but those contracts are with the agencies. It is totally impractical to have to produce a new and different set of terms and conditions every time a worker goes to work for a different company for a few days. That would result in huge additional bureaucracy that neither agencies nor companies, especially small companies, could afford. As has been mentioned, agency workers already enjoy many of the same rights as employed workers: four weeks' paid holiday, rest breaks, the national minimum wage, statutory paternity and maternity pay and statutory sick pay if they have worked for the agency for more than three months.

Nigel Evans: Was the hon. Lady as staggered as I to read in  The Times on 4 February that agency nurses are paid as much as £120 an hour? It is quite staggering if that is the case. We should really be fighting for the rights of ordinary nurses who work full time, rather than for the others.

Lorely Burt: I thank the hon. Gentleman for that most interesting intervention. I am not sure what side he is arguing on, but it was interesting nevertheless.
	The only rights that agency workers do not enjoy are those on which the flexibility of the agency model depends. Full-time staff rarely get full employment rights until they complete a probationary period of six months. The point has been made that if temporary workers receive full rights from day one, they will have more rights than permanent staff.
	There is one area, however, in which the Bill could be useful. Some 38 per cent. of agency staff are in place for more than six months. That clearly needs to be tackled. Where temporary and agency workers are employees in all but name, they should be entitled to full employment equality after a certain period. Employers' organisations acknowledge that. The Liberal Democrats would welcome negotiations between the Government, trade unions and the industry to find a workable solution to stop that form of exploitation.
	As we have heard this morning, the olive branch is being held out. The Liberal Democrats would be happy to support a vote for the closure motion and a vote for Second Reading, if one is called. However, we will oppose the Bill on Third Reading unless it comes back substantially amended after negotiations with employers, and particularly with bodies representing the employment agency industry.

Nigel Evans: My contribution to this important debate will be short. I congratulate the hon. Member for Ellesmere Port and Neston (Andrew Miller) on being successful with a private Member's Bill. It is not easy. He is clearly impassioned about the issue, because it is not the first time that such a Bill has come before the House. The Government were opposed to it then, and they appear to be opposed to it now, although they have dreamed up a commission to look into all the implications not only of the Bill but of giving equal treatment to agency workers.

Philip Davies: Another review.

Nigel Evans: My hon. Friend is being cynical. I think that it is important that we find out all the unintended consequences of any action that the Government might take, even when those actions are well intended, as the Bill clearly is. The Bill's intention is to ensure that the human rights of workers in this country are properly respected, and we must all applaud that, but it is the unintended consequences of well-intended legislation that puts the greatest fear in me. A lot of the legislation that passes through this place is intended to improve people's quality of life, but when the unintended consequences kick in, we often find that it ends up doing quite the opposite.
	If we are to believe the CBI, the Bill would result in the loss of 250,000 jobs. Clearly, the hon. Member for Ellesmere Port and Neston does not want to introduce legislation that will cause the loss of a quarter of a million jobs, but when the CBI says that, we must take it on board. It is a ball-park figure, but I assume that it is based on the implications of the Bill. The Minister said in response to several interventions that that figure is not his but the CBI's, but trying to squeeze out information on how many jobs the Government estimate would be lost if the Bill as it stands became an Act was beyond us. Quite frankly, we failed completely to get the Minister to answer that question.

Philip Davies: My hon. Friend is absolutely right—it was striking that the Minister was not prepared to come up with a figure—but does he agree that from the tenor of the Minister's remarks, it was perfectly clear that the Government believe that the Bill as it stands would lead to at least some job losses?

Nigel Evans: That is the impression I got. The Minister had the opportunity to say that although the CBI estimates that 250,000 jobs would be lost, the Government do not believe that there would be any job losses. When I asked the hon. Member for Ellesmere Port and Neston what he thought the Bill's impact on business would be, he said that he thought it would be positive—perhaps even lead to the creation of jobs. There is clearly a wide spectrum of views, and I would have hoped that the Government had done at least some research to find out what the impact would be.
	We want to ensure that we have a competitive and flexible labour market in this country. We want to ensure that people have jobs and good conditions in those jobs. I am an employer, although clearly I do not have hands-on management of that business in Swansea—my sister does all that. I know that a business man who employs people would have to be insane to maltreat his employees. A business wants to get the best out of its employees, and that is not achieved by maltreating those employees.

Philip Davies: My hon. Friend makes a powerful point, which goes to the nub of Government Members' misunderstanding of running a business. They seem to think that it is a case of either making a profit, or looking after one's staff. In my experience, the most successful companies in the world have two things in common: they look after their staff and they look after their customers. Looking after staff and customers is the way to guarantee success.

Nigel Evans: My hon. Friend speaks with great experience and wisdom. It is a case not of either/or, but of both. Investing in employees is something that a lot of businesses do. The money to do that comes out of their profits, but it is regarded as investment, not expenditure. It is important that businesses continue to invest in their staff and to make sure that they are properly trained. Some businesses enable their staff to complete degrees or higher education courses that they started before commencing work with the business. All of that is done by enlightened firms. What the Bill deals with is the activities of some unscrupulous employers in this country. Clearly, even under current law, there will be unscrupulous employers.
	The minimum wage has been mentioned: some people employed by businesses or other people are paid less than the minimum wage. That is happening now, and it is against the law. The legislation is on the statute book and it must be properly enforced. I heard the Minister say that we have a wonderful bus travelling around, at a cost of £3 million—it must be a nice bus.

Patrick McFadden: I suspect that the hon. Gentleman knows that the bus does not cost £3 million, or anywhere near it. The £3 million is spent on hiring more enforcement staff and advertising the availability of the minimum wage more widely. The bus, which is an effective mechanism in localities, costs a small fraction of that sum.  [ Interruption. ]

Nigel Evans: The hon. Member for Angus (Mr. Weir) says from a sedentary position that it must be the cost of the petrol for the bus. I am relieved to hear what the Minister says about the expenditure of £3 million, as it is important to get the message across to workers that they have rights and should not be paid less than the minimum wage. Clearly, some people are scared—that is what it comes down to. The employer—a bit of a thug—threatens the employee, saying that if they blow the whistle about being paid less than the minimum wage, they will lose their job, or something even worse will happen to them. That sort of behaviour must be eradicated. We have to do more to ensure that all employers respect the minimum wage legislation and do not undercut, in all senses of the word.

Adam Price: Does the hon. Gentleman not accept that the present law does not give workers enough protection? We saw that recently in the James case in the Court of Appeal, where a woman was employed as a housing officer by Greenwich borough council for three years, but as an agency worker. It was a means of avoiding giving her the employment rights that she would have had had she been appointed permanently. Is it not an abuse to employ someone on a temporary contract for three years?

Nigel Evans: I am staggered that the temporary job, if it went on for three years, was not translated into a permanent post, because in some cases, the amount of money that an organisation, whether a local authority or a business, pays for an agency worker is disproportionately high. It is not as though businesses always cut corners and save money by employing an agency worker: an agency worker can cost substantially more than taking on a permanent employee. There are all sorts of reasons why people take on temporary workers and all sorts of reasons why temporary workers want to be temporary—for example, they like the flexibility that such arrangements offer.

Philip Davies: On that point, have not the present Government piled on to businesses more and more costs and regulations relating to taking on permanent employees? It is no wonder that lots of employers have turned to temporary workers, given that administration of permanent employees is such a nightmare. Is not the problem that the hon. Member for Ellesmere Port and Neston (Andrew Miller) is trying to tackle one of this Government's making?

Nigel Evans: I wonder. There has to be a reason why businesses want to use agency workers for a longer period. It may well be that companies decide that they do not want to go down the route of having a human resources department, which will cost their business a fortune. Instead, they outsource to agencies such as Manpower, and then how much it costs to employ people is much more transparent. When the company takes everything into account, it may well be that the amount they pay for a permanent worker is substantially higher. All the extra rules and regulations—all well intended, no doubt—have a massive impact on employers. I guess that that is why the costs are substantially higher now.
	I referred to agency nurses being paid £120 an hour by health trusts. That was on the front page of  Metro and in  The Times. That is a staggering amount of money. That money should be going into employing permanent staff in hospitals, which would lead to substantial savings that could be spent on front-line services for the people who need to use the hospitals.

Greg Knight: I have been reflecting on my hon. Friend's opening remarks about the unintended consequences of the Bill. Clause 5 defines an agency worker as
	"any person who is supplied by an...employment agency".
	Can he envisage what will happen if a happy couple who have employed a group of musicians from an employment agency to perform at their wedding reception, decide that they want the group to go on after the resident band at the hotel? That could lead to litigation under the Bill as drafted. That would be an unintended consequence.

Nigel Evans: I should have thought that my right hon. Friend would have at least declared an interest as a musician and a member of MP4, the notorious group that we have in this place. No doubt it is available for hire at weddings. I have never seen such a flagrant plug.

Greg Knight: I am grateful to my hon. Friend for that advertising. I did not declare an interest because MP4 only performs for charity, so when I perform with the band I am unpaid.

Philip Davies: You are paid what you are worth.

Nigel Evans: Having heard MP4, I know that its members are certainly not paid what they are worth. It is a very good band.
	My right hon. Friend has picked up on one potential unintended consequence of the Bill. I hope that the hon. Member for Ellesmere Port and Neston would not want to get someone involved in unnecessary litigation over something that he did not think the Bill was going to cover in the first place. That is the problem. The Minister is correct when he says that the Bill has deficiencies. There are elements missing that could involve companies in substantial costs. For example, what is an agency worker? Is it someone who works one day? Seven days?

Michael Weir: The hon. Gentleman has twice talked about agency nurses being paid £120 an hour, but will he clarify whether that is the payment made to the agency or to the nurse? One thing that agencies often do is charge a great deal of money to supply workers, so it can be more expensive for the NHS trusts to employ agency workers.

Nigel Evans: I agree. I am unable to clarify for sure, but I suspect that it is the cost to the agency, not the nurse, and then the agency will top-slice whatever the amount in order to provide the service. After all, the service of agencies is to provide the people, which comes at a cost as well. I rather hope—I have tabled a parliamentary question on this matter—that the £120 figure was somehow or other a one-off anomaly and that there are not substantial numbers of agency nurses being paid that incredible sum of money, which, as I said, could be better and more properly used employing full-time staff so that the money saved could be put into front-line services in hospitals up and down the country.
	My hon. Friend the Member for Shipley (Philip Davies) said that we should take into account what it is like running businesses these days and the wider implications of employing people, including all the paperwork and the fact that advice has to be sought on the ever-changing rules and regulations that pertain to the rights of people working in the company. There is often a plethora of such stuff and many people simply do not have the time to read much of the information that comes through the letterbox or to fill in the questionnaires that the Government send out. Such things take up a substantial amount of time, but we should remember that many businesses are small businesses, possibly comprising two or three people or are even a one-man band.
	Let us take the example of digital switchover. Many more aerials and satellite dishes may need to be installed in only a short space of time and it may well be that more workers will need to be taken on for a short period to deal with pressure points in certain areas. Employers may not want to go through the rigmarole of issuing full-time contracts, given the short space of time involved. That is why they may want to employ agency workers. It is important to appreciate the mindset of people who own businesses and the costs to them if the Bill becomes an Act.
	It is all very well to dismiss what the CBI and the Institute of Directors—I declare my interest as a member of the IOD—say, but we should not do so too easily because they represent a lot of people who employ a lot of people, including agency workers. They have the relevant experience, so it cannot be right for us simply to ignore it and say that because everyone said that the minimum wage would be a disaster, but it was not, the outcome will be the same with the Bill. We should not operate according to such guidelines. We need properly to take into account the Bill's full implications.

Mark Durkan: No one is trying to dismiss the argument that we need to protect and optimise conditions for employment, but the hon. Gentleman and other Conservative Members seem to dismiss the need to ensure that we do more to protect conditions of employment.

Nigel Evans: I am sorry if that it is how it is coming across, because that is the last thing that I would want to convey. When I was at university, I earned a little extra money by working for Manpower for a while. I was counting traffic, which was a bit boring, for one short stint of time in Wales and in another stint I worked for the Hudson's Bay company in London. It provided great insight and it was Manpower that gave me the opportunity to have different tasters of jobs that I would not otherwise have thought of doing, so I have been on the receiving end as an agency worker.
	If someone is doing such agency work for a long time and no one in the household has a permanent job—in other words, someone is on a rolling programme with an agency—it makes buying a house very difficult. Getting a mortgage usually involves saying how much we earn on a permanent basis. For some people one of the benefits of being a temporary member of staff is the word "temporary"—as at some stage the job could come to an end and that is it, as that is what has been signed up to.
	I accept that there are, however, clear downsides to being an agency worker and we want to minimise them as much as possible. That is why we want to ensure that such rights as currently apply are, as I mentioned earlier, properly enforced. Rights for agency and temporary workers are important. The Government told us a few moments ago that they are spending £3 million on informing people of their rights to the minimum wage. Can the Minister tell us today how much money is being spent on informing workers and employers of the rights and obligations that apply to temporary or agency workers—the implications for holidays, redundancy pay and so forth? Clearly, the Government must spend some money on informing such workers of their rights—but there is silence, so perhaps the Government are not spending much on informing agency and temporary workers of their rights.

Philip Davies: Does my hon. Friend agree that many temporary workers may be migrant workers, who may well not be up to speed with the laws and rules governing them? Passing more legislation may make no difference at all. If Labour Members are so concerned about the number of people being exploited by employment agencies as temporary workers, perhaps their Government should have got a better grip on immigration into the country.

Nigel Evans: We need to consider how many people have settled in the UK from within the European Union. It is important to distinguish between people working legally and illegally. Illegal working can be a cause of concern about bad treatment, when people are treated badly simply because they are working illegally. I realise that people should not be working here illegally, which is one side of the coin, but on the other side, several millions of people have come to the UK over the past 10 years and they have the right to work and reside here. For some, their knowledge of the English language will not be brilliant and knowledge of their working rights given by successive Governments will not be brilliant either.

Patrick McFadden: The hon. Gentleman has raised the issue of informing people, particularly migrant workers, of their rights. I hope that the Conservatives would support the efforts of my Department and British embassies in several European countries to distribute "Know before you go" material in circumstances where people may be subject to exploitation. Such information tells them of their employment rights; it tells them that if they are here as legal workers they are entitled to the minimum wage and other core employee rights. Enforcement of the minimum wage, which I mentioned earlier, is not the only part of Government publicity and enforcement activity. When migrant workers come here legally, we want them to have access to the same rights as all our workers are entitled to. We make an effort to publicise that not just in the UK, but in the country of origin. It is sometimes before people leave their home country that the worst exploitation arrangements can be entered into.

Nigel Evans: I agree with the Minister and I am grateful for his intervention. Simply because people are migrant workers who have come from another country and have a right to work here, it does not mean that employers have a right to exploit them. I am not certain exactly how the required information about terms and conditions gets out to such people. I suspect that in many cases when people decide to come to the UK to work, they do not visit embassies in post so they would not be able to see the leaflets available there. The Minister makes a good point and I hope that we can get the message out to people that if they are coming to the UK to work, they should pick up the leaflets from the British embassy, read their rights and ensure that they are not exploited when they get here. That applies whether we are talking about the minimum wage or other rules and regulations. My hon. Friend the Member for Shipley spoke of his concern that substantial numbers of people here do not have a good command of the English language, so they may well not know their employment rights in this country. We must do more to make sure that people who have not been able to pick up such leaflets in their own countries at least get some schooling on their rights. Just because someone is a migrant, it does not give people the right to exploit them.
	I have examined the fears expressed by the IOD and the CBI about what would happen to employment if the Bill were enacted. There is a great fear that jobs will be lost, although we cannot pin down the figure—employers have suggested a figure of 250,000 jobs.
	Employers also fear a loss of flexibility, which has helped us compared with some of the countries in the European Union, where there is a lack of flexibility or, indeed, competitiveness. I know that we must compete with countries such as China and India, but we will clearly not take on their working practices, which would involve going back 100 years or more. When we compete with such countries, we must do so in the most efficient and effective way. We must maintain the highest standards for people in industry on health and safety and personal rights.
	We have to operate within the European Union. I am not sure exactly where we are as far as the European Union is concerned on this issue, and I do not know whether the Bill will be superseded by something dreamt up in Brussels. When France takes over the presidency of the European Union, Sarkozy, who is everywhere, will be super-active. He will want to make his mark in those six months, and employment rights may be an area that he examines.
	I would not normally look to France and say, "Look at its super-efficient industry." For a start, it is regularly on strike, which is just one of its bugbears. One reason why Sarkozy was elected was to make its industry more efficient and effective. People voted for the difficult option; they could have elected Ségolène Royal, in which case everything would have carried on as before with France regularly grinding to a halt. People decided to go with Sarkozy in the full knowledge that he would introduce legislation that would impact on industry. France is going in the opposite direction to make its industry more competitive and flexible, because it knows that that is what it needs to do. In the meantime, we will go in a completely different direction—basically, we will export our jobs to France, which is the last thing that we want to do.
	Many jobs are based in the UK because people think that the environment is competitive. If we were to introduce this legislation, and if France were to become more competitive, we would run the risk of exporting those jobs to France or another European Union country, in which case we would be the loser. Perhaps that is where the CBI has obtained its 250,000 figure.

Christopher Chope: Will my hon. Friend accept that if we had not opted back into the social chapter, we would not face that problem, because we would be able to decide on the legislation that best suits us in this country?

Nigel Evans: I totally agree with my hon. Friend—the EU should butt out. It should be up to each individual nation state to decide its own employment laws. I vote for my Government—not this particular Government, I hasten to add—and at least I can get rid of my Government. How can we get rid of European bureaucracy, which imposes a lot of uncompetitive nonsense on us?

Philip Davies: My hon. Friend is making a powerful point about competitiveness. Is he aware that the largest group of employers who use agency workers in this country are involved in manufacturing and production? The Labour party is always banging on about helping manufacturing—for example, the hon. Member for Chorley (Mr. Hoyle) is present, and he is a great advocate for manufacturing industry in this country. It is shedding crocodile tears to worry about manufacturing closing down in this country, when this Bill is one of things that is putting manufacturing at risk.

Nigel Evans: That is not an intended consequence of the Bill. I accept that the intention is to provide temporary and agency workers with some of the same rights as permanent workers, although, as I have said, there is a great deal of confusion about whether they already have those rights. Manufacturing is clearly on the ropes in this country, and adding further burdens would mean even more jobs being lost.
	Finally, the Government have mentioned the commission, but I am not sure how well established it is. On the radio this morning, the commission was described as another way of kicking the matter into the long grass.

Patrick McFadden: indicated dissent.

Nigel Evans: I am not sure who will be on the commission, but I assume that it will include people from employer organisations such as the CBI and the IOD and representatives from the trade unions. A number of organisations represent smaller businesses, and I ask the Minister to ensure that someone from one of them sits on the commission. Companies such as Ford or Honda employ thousands of people, and big business will be represented on the commission, but what about employers who have only two or three employees? Smaller businesses will see things in a completely different light, because they do not have a human resources department to advise them—they may or may not have an accountant. People who run smaller businesses pore over the books with a candle burning until gone midnight to try to ensure that they are complying with the ever-changing enforcements that are imposed upon them. It is therefore important that the commission includes an insight from smaller businesses on how regulations might impact on them. Smaller businesses employ agency workers, and we should proceed on the basis of experience.

Christopher Chope: Does my hon. Friend agree that we should be told the commission's reporting time scale today, because it is highly material to what might happen if the Bill goes into Committee and then comes back here on Report? It would be utter folly and a complete waste of parliamentary time if the Bill were given a Second Reading today only for the Government to block it thereafter because they are waiting for the results from the commission later in the year.

Nigel Evans: If the Bill is silent on several areas, the Minister has been silent on several other areas. One such area is the time scale for when the commission meets, its composition, how often it will meet and when it will publish a report, which I assume that the Government will then look into. It appears that the Government will not oppose the Bill on Second Reading. Although they do not want the Bill, as it currently stands, they will allow it to go Upstairs. The display of armed forces by the hon. Member for Ellesmere Port and Neston (Andrew Miller) indicates that the Bill will be read a Second time, because sufficient hon. Members will be here. A lot of parliamentary time will be used Upstairs on improving the Bill, but the Bill could be junked as soon as the commission reports. That does not seem to be a common-sense way of proceeding.

Christopher Chope: Does my hon. Friend think that the attitude of the Government today is best described as appeasement? They recognise that they are in no position today to produce the troops in order to defeat their rebellious Back Benchers, which is why they are appeasing those Back Benchers by saying that they will not oppose the Bill on Second Reading.

Nigel Evans: The shadow Minister, my hon. Friend the Member for Wealden (Charles Hendry), put it succinctly when he said that the Government are looking both ways. They have to produce different messages for different audiences. They are in hock to the trade union movement, but at the same time business organisations, to which they also try to be friendly these days, are telling them about the huge impact that the Bill will have. Looking both ways, which I thought that we left to the Liberal Democrats, is worse than the dithering that we have come to expect from the Government.
	Although the Minister has already spoken, I hope that he will at some stage—perhaps in an intervention on one of my hon. Friends who is lucky enough to catch your eye, Mr. Deputy Speaker—provide some of the answers to the questions about the time scale of the commission. If there are failures in the current agency system they should properly be repaired, and if people are being badly done by by unscrupulous employers who are looking for all sorts of loopholes and are using the agency system as a way of hitting the rights of their workers, we clearly need to address them.

Greg Knight: On the subject of information from the Minister, does my hon. Friend share my hope that the Minister will tell the House a bit more about the "Know before you go" leaflets and perhaps place one in the Library so that we can look at it? Perhaps he will also tell us how many languages the leaflet has been translated into.

Nigel Evans: I hope that the Minister will be able to do that, because the leaflets are a useful device. If they are only in English, they will be of limited help to a Polish person who has little knowledge of English. I assume that the leaflets will appear in different languages.

Patrick McFadden: The leaflets are translated.

Nigel Evans: Splendid. I assume that the leaflets will be translated into the languages of the countries in which the embassies are based. That is important. I also hope that the Minister will take on board our support for the need to get the information out and perhaps provide samples of the leaflets in the Library so that we can see what message they send.
	I know exactly where the hon. Member for Ellesmere Port and Neston is coming from with his Bill. We want to ensure that the people who work in this country get the proper protection that they deserve. I have great doubts that the Bill will do that, and clearly employers organisations and the Government also have great doubts. The commission is probably the right way to proceed so that we can examine the unintended consequences. It may be that tweaking the existing legislation may afford agency workers the rights that we all want them to have. If not, at least the commission can come back and say, "No. Fresh legislation is needed. This is what we need to do and this will be its impact. It won't destroy jobs and will give the protection that we want to give to agency workers." If that is the case, I am sure that such legislation will have the full backing of the House.

Philip Davies: It is a pleasure to follow my hon. Friend the Member for Ribble Valley (Mr. Evans). As ever, he spoke a lot of common sense and, as we all know, he speaks with the experience of running a small business.
	I totally accept my hon. Friend's point that the Bill is well meaning and that nobody is trying to do anything untoward. However, such Bills are born out of a total misunderstanding of what it is like to run a business and an ignorance of the pressures that many businesses face. Many Labour Members see businesses as some kind of cash cow or guaranteed profit-making machine and they believe that all those who run them drive round in Bentleys or Rolls-Royces and exploit workers willy-nilly. The reality is that many businesses, particularly small businesses in this country, are struggling to maintain their current employment levels. All that such Bills will do is put people out of work.
	I congratulate the hon. Member for Ellesmere Port and Neston (Andrew Miller) on introducing the Bill. He is a regular and distinguished contributor to Friday debates on private Members' Bills and I am therefore delighted that he has had the opportunity to introduce one of his own. This is the second time that such a Bill has been introduced by a Labour Member. The hon. Member for Newcastle-under-Lyme (Paul Farrelly) introduced a similar Bill in the last Session and that too had the support of well over 100 Labour Members.
	The Bill seeks to secure equal treatment for agency workers and will presumably ensure that they are entitled to the same terms and conditions as directly employed workers. The hon. Member for Ellesmere Port and Neston has argued that we cannot turn away from what is a mounting concern for our communities— legalised discrimination affecting a significant number of workers in this country. It strikes me that this Bill almost reflects the attitude of the Labour Members who would rather have fewer people in work provided that those who are left are employed under the same terms and conditions. As it happens, I would prefer people who have jobs to keep their jobs. That is a noble cause to support, but there is a dogmatic principle that everybody should be paid the same, even if they are a temporary worker. The fact that that worker may then be put out of work seems to be of no consequence as long as everybody sticks to the principle, which becomes an end in itself. I am afraid that I do not share that view; I want to see people in work.
	The Government are always talking about having to encourage people to get into work, including those who have never worked before. However, at the same time, it seems that the Government's Back Benchers are trying to do something that will stop people ever having the opportunity of getting into the workplace. My hon. Friend the Member for Ribble Valley spoke about the time that he spent as an agency worker and how that gave him an opportunity to get experience of work and develop a work ethic.

Nigel Evans: I was thinking of the time when I was at university. I did not pay any fees and received a small grant, but working for the agency allowed me at least to get by. The situation is now doubly worse. There must be many students who have fees as well as accommodation and food to pay for. If the Bill's impact means that many agency jobs will go, their plight will be even worse. They must be relying on a lot of agency work.

Philip Davies: Such work instils a work ethic in people that we hope will take them further forward, and my hon. Friend is absolutely right about the pressures facing students. I know from my experience at Asda that we took on temporary workers when we needed them and many of them were students or people looking for work experience for the first time. Most of those people did not work there for years on end; such examples are few and far between. The vast majority of them work for the company for a short time and that does them good. They know what they are being paid, they understand the terms and conditions and are happy to take a job on that basis. They see that it offers them an entrance into the workplace and might well help them finance their studies while they are at university. It gives them an opportunity that they want and that they make the most of. It would be folly to introduce a Bill that might have the impact of not providing those people with an opportunity to get their foot on to the first rung of the working ladder, because it would be unattractive to employers to take them on. We want to encourage people to have a work ethic if they have never had a work ethic before. Agency working is often the way into the workplace for many people.

Christopher Chope: Does my hon. Friend agree that, if the Bill goes through, it will make it more difficult for people to have access to work experience? The Government seem to want to promote work experience among younger potential employees, but this Bill runs against that.

Philip Davies: My hon. Friend is entirely right. The Government also talk about extending the number of apprenticeships, but most people have the understanding that those employed on apprenticeships are not employed on the same basis as permanent staff who have been there for a long time. We all acknowledge that, if people are trying to get a foothold in the workplace, employers need concessions to be encouraged to take them on. It strikes me that the Bill flies in the face of everything that the Government say about trying to instil a work ethic and about getting people who have never worked into work for the first time.
	To be fair, the hon. Member for Ellesmere Port and Neston said that the Bill was not designed to end agency working in itself but to ensure that agency workers were paid the rate for the job. The Bill does not clarify the period that agency workers must work before they qualify for equal treatment. Without any indication of the qualifying period, the Bill must appear to everybody—even those who support its thrust—as fatally flawed on that basis alone. I heard talk—the Minister will correct me if I am wrong—of six months being mooted as a qualifying period. It is perfectly clear that most hon. Members who have turned up today do not believe that there should be a six-month qualifying period; they do not think that there should be a qualifying period at all. The unions that are behind the Bill are clearly against any six-month qualifying period.

Christopher Chope: As the Bill stands—without a qualifying period—it would impact on temporary employees immediately. Does my hon. Friend agree that the Government should assess the Bill on the basis of its current contents, rather than on what its provisions might be in the future?

Philip Davies: My hon. Friend is absolutely right. When we take a decision on Second Reading, we should judge the quality of the Bill as it stands. I heard the spokesman for the Liberal Democrats, the hon. Member for Solihull (Lorely Burt), say that they would do the typical Liberal trick of supporting the Bill on Second Reading but opposing it on Third Reading. That strikes me as trying to ride both horses at the same time. If the Liberal Democrats are against the Bill, they should vote accordingly on Second Reading.

Simon Hughes: The hon. Gentleman misrepresents my hon. Friend the Member for Solihull (Lorely Burt). She said that we would not oppose the Bill's Second Reading, but that unless it was substantially amended, we would oppose it on Third Reading.

Philip Davies: I urge the hon. Gentleman to look at the Bill as it stands, because that is what will be voted on today. If he is saying that the Bill is unacceptable as it stands, may I suggest that he vote accordingly?

Simon Hughes: I do not want to delay the debate. Our position is similar to the Government's. They say that they will not oppose the Bill on Second Reading. They do not support it, but they hope that things will emerge from ongoing discussions—so do we. Such discussions will be more likely to happen if the Bill goes into Committee, because that will put pressure on the Government and focus their mind.

Philip Davies: But the Liberal Democrat spokesman talked about all the problems with the Bill, whether it is slightly amended or not. She suggested that the basic premise of the Bill is wrong. The hon. Gentleman's party's position is not the same as the Government's. The Government are against the Bill, but they understand that the vast majority of Labour Members who are here are in favour of it. The Government have caved in not due to any point of principle of wanting it to go into Committee, but because they are engaged in a cynical tactical manoeuvre to allow them to avoid a huge row with their Back Benchers. They will allow the Bill to go into Committee, no doubt so that they can try to fillet it and make it completely meaningless. I am not entirely sure whether that position is the same as the hon. Gentleman's. I shall give him the opportunity to clarify the situation.

Simon Hughes: In that respect, the hon. Gentleman is being helpful. As far as I am aware, my colleagues and I have one view—a common view. He is right that that is not the same as the Government's position.

Philip Davies: I am pleased that the hon. Gentleman has been able to clarify the position.

Christopher Chope: Before my hon. Friend gets seduced into thinking that there is a common view among the Liberal Democrats, will he recall exactly what the hon. Member for Solihull (Lorely Burt) said? I clearly remember that she said that her party would support both a closure motion and the Bill's Second Reading. That seems to be very different from the understanding of the hon. Member for North Southwark and Bermondsey (Simon Hughes).

Philip Davies: My hon. Friend was clearly listening to the hon. Lady's speech more enthusiastically than I was. I am sure that the  Official  Report will make exactly what she said abundantly clear. Perhaps the hon. Member for North Southwark and Bermondsey (Simon Hughes) will clarify the situation once and for all.

Simon Hughes: I really was hoping that we would not get into this. If there is a closure motion, we will support it. We will not oppose the Bill's Second Reading. We will then see what comes out of Committee. Unless the Bill is substantially amended, we will oppose it on Third Reading.

Philip Davies: I am grateful for that clarification—if it was a clarification. Despite our brief interlude, I am none the wiser about the Liberal Democrats' position. However, I am sure that other people will have been able to understand the hon. Gentleman's comments.
	The Bill would ensure that provisions on equal treatment were backed by a stronger regulatory framework that would include mandatory licensing arrangements and better inspection regimes, with strict penalties for non-compliance. The Minister said that the Government did not believe in people going round businesses to inspect for compliance with the law. I am not entirely sure whether that aspect of the Bill would mean that more people would be inspecting businesses and taking up more of their valuable time by asking to see paperwork to determine exactly what they were doing.
	My hon. Friend the Member for Ribble Valley made an important point when he talked about the impact of such measures on big businesses rather than small ones. I had the great fortune of working for Asda, which is a very big business that is owned by the biggest company in the world: Wal-Mart.

David Taylor: And the most exploitative.

Philip Davies: I do not know whether the hon. Gentleman has visited Wal-Mart in America, but I have. My experience is that Wal-Mart looks after its employees much better than most businesses in this country. I am not entirely sure of his experience of Wal-Mart and its employees, but I would be happy for him to share that with us.

Greg Knight: My hon. Friend is making the very good case that the Bill could lead to job losses. Those losses could be far greater if France moved in the opposite direction, as we have heard. Is he thus about to argue that the answer would be an EU-wide common employment policy for all member states?

Philip Davies: My right hon. Friend knows that I would never argue for a common EU policy on anything, certainly while we are a member of the European Union. Once my panacea arrives and we are no longer a member of the EU, I will be happy for the remaining members to impose as many burdens and costs on themselves as they wish, because that will give us a competitive advantage. However, while we are a member of the wretched European Union, I am not in favour of a common position.

David Taylor: The hon. Gentleman invited me to refer to Wal-Mart. As an ex-employee of that empire, and to give us a measure of its progressive industrial relations in the United States of America, will he indicate its attitude towards the recognition of trade unions?

Philip Davies: I am more than happy to deal with the hon. Gentleman's question. During my time with Asda and Wal-Mart, the number of people who were members of a trade union fell. Asda recognises a trade union: the GMB. To the best of my knowledge, it has a good relationship with that union. However, during my time at Asda, fewer and fewer people were joining the union, and the reason why touches on a point made by my hon. Friend the Member for Ribble Valley. From everyone's viewpoint—especially that of the Government, who are often praising Asda for its employment practices—Asda is a very good employer. It gives its staff good terms and conditions and allows them flexible working. It makes a point of going out of its way to look after its employees, so people do not feel the need to join a trade union as they do not feel that they are being downtrodden.
	As my hon. Friend said, successful businesses tend to have two things in common: they look after their staff and they look after their customers. I am not aware of any successful business throughout the world that does not abide by those two principles. Every failed business in the world has two things in common: they did not look after their staff and they did not look after their customers.
	I have always believed that of the two, the most important is looking after staff, because companies rely on their staff to look after their customers. If companies are not looking after their staff properly, the likelihood is that they will not be looking after the customers properly. I take no lessons from anyone on the importance of employers looking after their staff. The company that I used to work for made a great point of looking after its staff, which it did probably better than virtually anybody. The result was that fewer people wanted to join a trade union.
	A large number of Labour Members support the Bill, and more than 150 have signed an early-day motion on the subject. As I understand it—perhaps I will be corrected if I am wrong—the hon. Member for Ellesmere Port and Neston believes that backing the Bill would enable the Government to fulfil their manifesto commitment to enact domestic legislation to ensure the equal treatment of temporary and agency workers. I am delighted to see, first, that so many Labour MPs have come along to stick the boot into their Government, and, secondly, that so many are here to fulfil a manifesto commitment. I very much hope to see the Labour Benches full in a few weeks' time when we debate a referendum on the European treaty. If fulfilling one's manifesto commitments is so important, let us hope that Labour Members demonstrate a great deal of consistency in that.
	The Government say that they refuse to back the Bill but that they will not oppose it on Second Reading. Their opposition to it is at best lukewarm. They say that they do not want to introduce any measure that could cost British businesses jobs. It strikes me from that that they concede that the Bill, if enacted in its current form, would cost British businesses jobs. I do not understand how on earth any Labour Member could want to sign up to and support a Bill when their own Government have made it abundantly clear that they believe that it would lead to job losses in this country. As we heard, the CBI estimates that the Bill as drafted could lead to 250,000 job losses. Its people are at the chalkface and they know what is going on in their businesses. I have always believed that the people who know best about any particular subject are those who are involved in it every day of their lives, because they see it as it is. It is not us pontificating from a comfy chair about what businesses should or should not be doing to look after their workers that matters; it is the businesses themselves that know what pressures they face, and they say that the Bill could lead to 250,000 job losses. The Minister would not say how many job losses he thought that we would see as a result of the Bill, but it is clear that the Government accept that there would be job losses.

Christopher Chope: The debate has often taken place in the context of the Bill being a burden only on business, but it could also place a large burden on the taxpayer because almost 40 per cent. of the 1.4 million temporary workers work in public administration and the public sector.

Philip Davies: My hon. Friend is right. Many Departments employ temporary and agency workers. It would be interesting to know what policy the Government employ on the treatment of their temporary workers, and whether they enjoy the same pay and conditions as permanent staff. The Government and Labour Members want to inflict such measures on businesses, and it would be nice to know that they were setting an example. I am certainly interested to know how the public sector treats its temporary workers. It does not need to wait for the law to change to implement best practice as it sees it. If the measure is so important, the public sector can implement it in its workplace. No one needs to wait for particular legislation to be introduced before doing that. I am happy to give way to the Minister if he wants to indicate the Government's policy on their treatment of temporary and agency workers whom they employ. He does not seem to want to get into that, from which we will have to draw our own conclusions.
	An impasse seems to have been reached at a European level on the text for a temporary and agency worker directive, and that appears to have prompted the calls for a national Bill. As my right hon. Friend the Member for East Yorkshire (Mr. Knight) said, the debate has been going on in the European Union for many years. My understanding is that the Government have always played their part in trying to kill off the proposal at European level, which makes it all the more surprising that they do not have the courage of their convictions to vote against the Bill on Second Reading. They have been active behind the scenes in Europe in opposing the Bill, but it appears that they will be reticent in a public vote of the House of Commons, which would enable people to see where the Government stand on it.
	A number of organisations fundamentally oppose the Bill, and I shall go through each in turn to see what they think of it. The British Retail Consortium, which I know well from my time working for Asda, has fundamental objections to the Bill. The first, which was also made clear by my hon. Friends the Members for Wealden (Charles Hendry) and for Ribble Valley, is that agency workers are already covered by all key employment rights. Health and safety was also mentioned, and they are protected by health and safety legislation as well. They are also protected by, anti-discrimination legislation, just like any other worker, so on many levels, the Bill is not required.
	The flexible labour market, which the Bill seeks to undermine, benefits not only businesses but the people who work for them. Of course, it allows companies to meet peaks in demand, but it also allows workers to manage their work alongside other commitments. Temporary working means that people can work when they want to work, and not necessarily always at the times that their employer wants them to work, so they can conduct other activities. The British Retail Consortium believes that temporary working offers a valuable route into the workplace. Last week, I spent four days working in St. George's Crypt, which is a homelessness project in Leeds. It does a fantastic job in tackling homelessness in Leeds and helping people with addictions. People who work there regularly told me—and I saw this for myself—that we have to instil a work ethic in people in that position.
	There are many families in which no one has worked for generations. They do not have any experience of work, so they do not know what it is like to get up in the morning and go to work. Temporary and flexible working gives those people the opportunity to gain a work ethic. They may work only a few hours a week to start with, or a few hours a month, but at least that gets them into a routine. If we seriously wish to help vulnerable people—homeless people and people with addictions—to have a normal life, which, to my mind, means going out to work every day, temporary working is a valuable way of giving them a work ethic. If we imposed extra burdens on businesses to employ temporary workers, it would, at a stroke, take away the opportunity from many of those people to get a foot on the work ladder.
	Equal pay between agency temps and permanent employees cannot always be justified, as we must take into account differences in loyalty and experience. Many good employers make a point of rewarding the loyalty of employees who have worked for a company for a long time by giving them bonus payments. Are we really saying that, under the Bill, someone who wishes to work for only a few weeks for their own benefit and convenience should, at a stroke, be paid the same as someone who has been a loyal and faithful servant to a company for many years? If that is the route we are going down, it will be bad for employees and undermine employers' attempts to reward loyal employees.
	Such an approach would also lead to prohibitive costs, preventing companies from using agency workers at all. The hon. Member for Ellesmere Port and Neston said that his Bill was not designed to end the practice of agency working, but if we made it expensive to employ temporary workers, that would be the practical outcome, as the Bill would stop people using temporary workers. We have got ourselves into that situation, because time after time, the Government have made it more expensive to employ people. One need only speak to businesses in one's constituency to discover that it is a nightmare to employ people. They say that it is time-consuming, bureaucratic and expensive to take people on as permanent staff. If staff do not perform properly, the hurdles employers have to overcome get rid of them are a nightmare. Many small businesses cannot cope with that. My hon. Friend the Member for Ribble Valley made a point about the different needs of big businesses and small businesses.

Greg Knight: Is my hon. Friend certain that his example of bonus payments would be covered by the Bill? One could argue that giving a long-serving, loyal employee a bonus payment would be justified "on objective grounds" under clause 1(2).

Philip Davies: My right hon. Friend raises an interesting point about clause 1(2). He may well be right that bonus and loyalty payments may be exempted on the basis of objective grounds, but the Bill does not define objective grounds. The meaning of that phrase may have to be tested in a court of law. It would be incredibly damaging, expensive and time-consuming if every time an employer wished to do something to support a loyal and long-serving member of staff, it faced court action. It would be completely debilitating for businesses to be left in limbo, not knowing what they could and could not do as a result of the Bill. Therefore, I say again that even those who might agree with the Bill's thrust could not possibly support it because of the uncertainty that it would create.

Nigel Evans: Is my hon. Friend aware that in 2006 the Department for Work and Pensions had 120 agency staff, between 2005 and 2006 the Department of Health spent more than £12 million on agency staff, and in 2006, to meet the single farm payment scheme, 53 per cent. of the staff working on that matter in the Department for Environment, Food and Rural Affairs were agency workers? The Government therefore endorse the efficacy of employing agency staff, but the Bill could impose an extra burden and cost on them.

Philip Davies: My hon. Friend is entirely right. The poor, hard-pressed taxpayer has already paid enough without being expected to cough up even more to fulfil the obligations that the Bill may inflict. Given that so many temporary workers are employed by the Government, they could implement the measures contained in the Bill for their workers anyway. They do not need any law to be passed for them to implement these measures for their own staff, which might well serve as a shining example to other employers.
	The British Retail Consortium makes it abundantly clear that temporary staff are protected by the national minimum wage, health and safety, discrimination and working time legislation. It feels that there is a perception, particularly among Labour Members, that temporary workers are subject to unsafe conditions, suffer discrimination, are paid badly and work long hours. I have no idea on what basis they make that assumption, but it is clearly one that they make. Agency workers receive the same protection in all those areas, including working hours, pay, discrimination and unsafe conditions, as any other worker. The perception of temporary workers that some Members are seeking to create is simply untrue.
	Another point that has already been made and which bears repeating is that agency work is often more expensive than direct employment as employers pay the agency a fee that covers the wages and the agency's costs. Therefore, businesses are not using agency staff to save money, but because it suits their needs to do so. We heard a lot about unscrupulous employers, and there are doubtless employers who do not comply with the law, but surely the answer cannot be to pass even more laws for them to ignore. There is always the desire to be seen to be doing something. Whenever the Government are faced with a problem, there are two elements to their solution. The first is that they must be seen to be doing something, and the second is that whatever they do must not offend anybody, so we end up with more and more well-meaning legislation, none of which is ever properly enforced. Surely the Government should be concentrating on enforcing existing legislation, before they think of embarking on new legislation.
	We come back to the driver for the Government in even considering allowing the Bill to go into Committee and seeing it come into effect in one form or another. As the right hon. Member for Makerfield (Mr. McCartney) said, this is about implementing not necessarily a manifesto obligation, but the Warwick agreement pledges. The Labour party has been reticent about expanding on what that agreement means, but let us be clear what it means. Before the last general election, the trade unions agreed to bail out the financially embarrassed Labour party to the tune of millions and millions of pounds, to help it to fight the election, on the condition that, if it was elected back into government, it would implement an awful lot of legislation that would do huge damage to businesses—on the condition that it would implement all the favourite hobby-horses of the trade union movement. The Bill is about honouring the Warwick agreement. To my mind, and I am sure to that of most of the public, it is a rather grubby agreement, even if we look at it in the best of ways.
	That is what the Government are indulging in. They are not doing what they think is in the best interests of the country or of protecting people's jobs, or doing what is the fairest thing for all concerned. They are doing something that they were forced to do because they had no money before the last election. They have been forced into doing so to get themselves out of a financial hole. That cannot be any way to set legislation. This is being done under that grubby arrangement.
	The British Retail Consortium has always made it clear that it wants to ensure that no worker is exploited. I am sure that the Minister will confirm that it has worked with the Government on targeted enforcement of the national minimum wage, for example, as well as other issues involving vulnerable workers, so it is not as if employers such as those in the British Retail Consortium are trying to protect unscrupulous employers. It has been doing its best with the Government to try to clamp down on unscrupulous employers. It is trying to protect jobs and people's access to the work market.

Christopher Chope: Does my hon. Friend accept that one of the advantages of temporary work is that, if someone finds themselves working for an unscrupulous employer, they can terminate that employment straight away and then be placed by their agency with another employer who is not so unscrupulous? There is much more flexibility than one would get if one were in permanent employment.

Philip Davies: My hon. Friend is right that one of the beauties of working for an agency is not only that it allows people to have a job that they can fit around their other commitments; it also means that, if they find somewhere to work that does not suit them and they have a clash with the people who employ them or something along those lines, they can easily move on to another employer, and someone else can take that job. People do not take these jobs for very long as a general rule. My hon. Friend is entirely right in what he said.
	Around 2 to 3 per cent. of all workers are employed on an agency temporary contract. Earlier, we heard that only about 6 per cent. of people are on a temporary contract. Therefore, this is not a big part of the work force. It is a rather small part of our general work force. Nevertheless, it is incredibly important. These people work in a way that suits both the workers and the businesses.
	Figures show that up to half of agency workers are not even seeking a permanent job. The industry surveys show that 52 per cent. of agency workers choose temping for positive reasons. They are making a conscious decision to work in that way. Sometimes, they do that because they get better pay working for an agency, or to gain valuable work experience. Twenty per cent. use temporary work as a route into a permanent job. Therefore, for lots of people, it is a foothold into a permanent job. If we were to take away that particular avenue, those people might not end up with a permanent job in the long run, or benefit from any of the rights that the hon. Member for Ellesmere Port and Neston wishes them to have.
	Given the global competitive market in which we work, agency work is needed now more than ever. Given that we have had extensions to holiday entitlement, to maternity leave and to paternity leave, it is crucial that it is as easy as possible for businesses to take on temporary workers. If the Labour party wishes to impose all these benefits on people who are permanent workers, it has to acknowledge that someone has to fill in the gaps. That is where temporary workers are crucial. We must protect temporary agency workers, not clobber them.
	Equal pay cannot always be justified, as I discussed with my right hon. Friend the Member for East Yorkshire. There is a wide variation in pay in the temporary agency market. Many agency temps get a higher rate of pay than they would get in permanent roles. My hon. Friend the Member for Ribble Valley gave the example of nurses. He is absolutely right, and the same point applies to teachers. Supply teachers employed on a daily basis often get a higher rate of pay than they would if they worked permanently. The arrangement suits everybody. It suits the teachers concerned, because they might have other commitments. People get paid more because they are available at short notice, thereby enabling them to meet the possible needs of a school or, in the case of nursing temps, a hospital. We do not want such workers not to be available at short notice when people in our schools and hospitals need them.
	People in accountancy also often work on a temporary basis when, for example, tax return deadlines are approaching, and one of the biggest sectors for temporary staff—in which people actually choose to be temporary staff—is IT, particularly skilled IT. People with expertise in a particular field are brought in for short periods and are very well remunerated. The idea that people on temporary working contracts are all exploited horribly by mean and nasty employers could not be further from the truth in many cases.
	The British Retail Consortium has said that in order to be fair, if such legislation is enacted—it is an "if", and the BRC is clearly against it—the qualifying period before equal treatment is to be considered is crucial. It seems that those who support the Bill do not want any qualifying period whatsoever. The Government have mentioned, I think, a period of six months, but the BRC believes that 12 months would be required. That would bring everybody in line with other, related employment rights such as protection against unfair dismissal; at the moment, somebody has to work for a year before they are entitled to such protection. If we are to go down this route, we must surely have a qualifying period, and it must be the same as for other kinds of employment.
	Too short a qualifying period would price some temporary workers out of the market, particularly the most vulnerable ones who are trying to seek a way back into the employment market after unemployment or a way into it for the first time. It should be pointed out that EU states such as Germany adopt a similar approach, while others pay agency temps at a special trainee rate. Such options might be considered if the Government end up going down this line and giving in to their Back Benchers.
	It is clear that the British Retail Consortium is wholly opposed to the Bill. I should point out to Labour Members that its member organisations employ an awful lot of people in this country, such as those working in supermarkets. It therefore speaks on behalf of a great many employers, who employ a large number of people.
	It is important that we examine the labour market outlook surveys of employers. Employers were asked about the EU agency workers directive, which is the forerunner to this Bill. It is interesting to note the attitude of different employers when considering the issue. It has to be said that speculation is rife that some form of agreement on this directive will emerge during the French presidency, as my hon. Friend the Member for Wealden indicated. The wish is to impose burdens on our businesses to help us become less competitive in relation to them.
	I want to spend a little time examining employers' reactions to the Bill in surveys of the labour market outlook. Let me make it abundantly clear that UK employers' reliance on agency workers is very high. In one survey, 76 per cent. of organisations that took part reported that they make some use of agency staff. Although few people might be employed on temporary contracts, a lot of businesses and organisations in this country depend on temporary workers. As I mentioned in an intervention, dependence is particularly high in manufacturing and, as my hon. Friend the Member for Christchurch (Mr. Chope) made clear, in public services.
	The incidence is much lower in Wales at 67 per cent., Scotland at 62 per cent. and Northern Ireland at only 53 per cent. than in England, where more than 70 per cent., and in some parts of England more than 80 per cent., use temporary staff. In parts of the south-east in particular, it can be very difficult to recruit staff with the right skills. It is therefore crucial to have a ready-made pool of talent to use while trying to recruit permanent staff. Those employed on a temporary basis might move into a permanent job in the long run if they prove themselves.

Greg Knight: Will my hon. Friend also recognise the importance to the tourist industry of seasonal and agency workers?

Philip Davies: My right hon. Friend is right. His constituency includes Bridlington, which benefits hugely from tourism. He is a great champion for tourism and for his constituency. My hon. Friend the Member for Ribble Valley and I are conducting an inquiry into tourism on the Culture, Media and Sport Committee. We will look at the importance of temporary, agency and even migrant workers to that industry. Many businesses are finding it hard to compete with cut-price deals abroad, and we would not want to undermine further the tourism industry and small bed-and-breakfasts and hotels.

Greg Knight: I am delighted to hear my hon. Friend's comments. In passing, may I invite him and my hon. Friend the Member for Ribble Valley (Mr. Evans) to visit Bridlington, where I shall be happy to stand the drinks?

Philip Davies: My right hon. Friend makes a tempting offer, which is hard to turn down. I look forward to fixing that up with him shortly.

Nigel Evans: Does my hon. Friend recall that the Culture, Media and Sport Committee heard evidence from a hospitality industry representative that a large number of migrant workers were working in tourism and hospitality? That is a clear example of the need to ensure that people know the existing rules. The last thing that we want is a huge raft of new legislation that either will not be enforced or, if enforced too rigidly, will result in the disappearance of the jobs that migrant workers do to serve the public in areas such as my hon. Friend's and mine.

Philip Davies: My hon. Friend is right. I am sure that he will recall that, according to the hospitality industry representative who appeared at one of our evidence sessions, the reason why so many migrant workers work in the tourism industry is that it is difficult to get people in this country to turn out to work. The work ethic of people in this country is poor compared with that of some of the migrants that the industry employs. In this country, 1.25 million 16 to 24-year-olds are not in employment, education or training—they are doing nothing. If, by using temporary agencies, we can find a vehicle to get some of those people off their backsides and into some kind of work, it will do an awful lot of good, not just for them and their families but for the economy and the country. As a result, we would probably not need as many people coming into the country. We must be mad to let people come in and take jobs that people in this country are more than capable of doing. If the people here do not get any foothold in the employment market, that is only a dream. Temporary agencies give a lot of those people their first stepping stone into work. The proportion of employers that use agency workers— [Interruption.]

Mr. Deputy Speaker: Order. Conversations are breaking out throughout the House. Hon. Members must listen to the hon. Member who is addressing us.  [Interruption.] Order. If hon. Members are not intending to listen, I suggest that they leave the Chamber and find something to do for the time being. When an hon. Member is addressing the House, it is normal to listen to what they have to say.

Philip Davies: I am very grateful for that, Mr. Deputy Speaker.
	Returning to the survey, the proportion of employers that use agency workers is interesting. Some 85 per cent. of manufacturing and production employers use agency workers at some point, as do 85 per cent. of our public services.
	I mentioned briefly the importance of the manufacturing sector to our economy in an intervention on my hon. Friend the Member for Ribble Valley. Everybody in the House agrees that this country's manufacturing base is in a rather precarious position. It has been going downhill for many years, and we should be doing things to try to protect it. As he said, we face more and more global competition from places such as China and India. We will never be able to compete with them on employment costs and practices, nor should we try to do so, but it must be going in completely the wrong direction to keep piling more and more regulation on our businesses.
	If Labour Members are so concerned about the working practices of workers across the world, surely it is better to try to retain as many manufacturing jobs as we can in this country, with the high employment obligations that we have, rather than price people out of the market in this country so that they set up a manufacturing plant in Beijing, where health and safety protection is virtually non-existent, and the wages are, too. Surely Labour Members concede that it is better that jobs remain in this country, even with slightly less protection than they would want, than to have them farmed out to places such as China and India, where workers will get no protection whatever.

Nigel Evans: I want to make a point about call centres. It is great to have them in the United Kingdom—we have a lot of them, they provide jobs, and I suspect that many of those are agency jobs. If, all of a sudden, we start pricing those jobs out of this country, it would be easy for companies to start using call centres in India or other parts of the world, and that has been done. We are talking not about protecting agency workers but about removing jobs from this country and exporting them to other countries where, as my hon. Friend has just said, health and safety standards, and pay, may be much lower.

Philip Davies: My hon. Friend is entirely right, and he is right to raise the subject of call centres. In my time at Asda, I spent a number of years supervising the call centre that it ran. Customers used to ring up with complaints about service or the products that they had bought. We used to employ quite a few temporary workers from agencies, and there is a quite a high turnover in call centres. I would like to think that we were a good employer, but by the nature of the people that call centres tend to employ—students or recent graduates—there is bound to be a turnover of staff. As long as they move on to bigger and better things, that is good. If we played our part in giving them the skills that they needed to move on to a better job, that was to everybody's benefit.
	The point about taking on temporary staff that is not understood in the Bill is that, when we needed someone to do a job at short notice, we as an employer were taking a gamble. When someone takes on a permanent member of staff, they advertise the job and say exactly what qualifications and skills are needed. People then go through an interview process. They are interviewed to see how they would fit into the culture of the organisation and whether they have the skills and experience that are being sought, or any other personal qualities that are wanted. Employers can do tests and all kinds of things to ensure that they get the right person. Once all that has been done, it seems perfectly reasonable that the person would be paid a particular rate to do that particular job. When employers use a temp agency to get staff, however, they do not have those luxuries. They are taking a gamble that the person who walks through the door—

Andrew Dismore: rose in his place and claimed to move, That the Question be now put, but Mr. Deputy Speaker  withheld his assent, and declined then to put that Question

Philip Davies: I am grateful to you for that, Mr. Deputy Speaker. I am surprised that the hon. Member for Hendon (Mr. Dismore) would wish to cut me short, given the remarkable stamina that he displays when he speaks in these debates. I can assure him that there is plenty more that I wish to cover in my speech before I shall be ready for him to cut me short.
	Employers who go to temp agencies for staff are taking a gamble that the person who walks in through the door will be capable of doing the job, and that they will fit in with the culture of the organisation. It is perfectly reasonable and rational that that person would initially not be paid at the same level as everyone else, because it is impossible to guarantee that they will be of the same calibre. An employer might well have asked the agency to send someone with particular qualities, but even so, they are still putting their trust in someone else. It is perfectly reasonable, if they are taking a gamble on someone, to pay that person less than they would pay someone who has gone through a rigorous recruitment process for the same job. Those people would not have got the job on the same basis. One would probably have had several days of interviews to get the permanent job, while the other would simply have walked through the door because a temp agency had sent them. Why on earth would they both deserve the same level of pay from day one? I do not see the logic of that argument.

Christopher Chope: Does my hon. Friend regret the fact that there seems to be a mood of intolerance among the Labour Members who are listening to his important arguments? This issue could affect as many as 1.4 million of our fellow citizens.

Philip Davies: My hon. Friend makes a good point. I am disappointed that Labour Members wish to cut short the debate on a Bill that, if enacted, could result in the loss of 250,000 jobs in this country. One would have thought that they would want rather a lot of scrutiny of a piece of legislation that could cost 250,000 of our constituents their jobs.

Nigel Evans: Another beautiful thing about agency work is that it allows people to test different jobs. They might not always know what they want to do, and they can try several different ones through an agency. They might then find one that they would like to do on a permanent basis. They will have built up a rapport with the firm while working there as an agency worker, and the firm will know what they are like and what they are worth when they employ them on a permanent contractual basis afterwards.

Philip Davies: My hon. Friend is right. Accessing an employer through an agency is a good way of showing that employer how good we are in order to gain a permanent contract. Indeed, 87 per cent. of the organisations that responded to a recent Labour Market Outlook survey said that they had recruited permanent staff who had initially worked for them as agency workers in the year prior to the survey. The hon. Member for Ellesmere Port and Neston wants to give people certain rights, but many are gaining those rights anyway within a short space of time, once they have proved themselves in that way.
	I am sure that we all know people who are good at certain things and less good at others. I certainly know people in schools who say that are not particularly good at sitting exams, and that they freeze on the day and do not do themselves justice. That is why we went—wrongly, in my opinion—down the route of assessing coursework instead of setting exams. That was the rationale for doing that. Similarly, there are probably lots of people who do not show themselves in their best light in interviews or selection tests. Getting some on-the-job training through a temp agency allows such people to prove how good they are, and that might well be the best way for them to get a permanent job with the enhanced rights that Labour Members want them to have. Labour Members have not understood the importance of temporary agency working as a way of getting into a permanent job. By making it less attractive to take on temporary workers, the Bill could prevent many people from getting a job at all, because they would not have the opportunity to prove themselves in that way.
	According to the survey, agency workers earn about two thirds what permanent employees earn, although, as I mentioned earlier, it would be wrong to conclude that all agency work is low paid and low status because some of the best-paid and highest-status jobs are temporary. However, it is also true that temporary employees generally have a more positive attitude to their jobs than permanent employees, possibly for the reason mentioned by my hon. Friend the Member for Ribble Valley. I meet lots of people who are about to leave school or university, and when I ask them what their ambition is and what they want to do when they leave school, lots of them say—it is quite a respectable answer—"I don't really know. I'm not entirely sure what I want to do."
	Temporary work gives people an opportunity to try out different forms of employment. They may work in a call centre for a while, find that it is not for them and go back to their agency and say, "It's not really working out. Could you find me a job somewhere else?", or they may take to it like a duck to water and want to stay. The survey shows that temporary employees generally have a more positive attitude to their jobs, even though they have fewer employment rights than permanent employees. That did not come out in the remarks of the hon. Member for Ellesmere Port and Neston
	In the survey, employers' organisations contended that it is inappropriate to require that agency workers be given the same pay and conditions as permanent employees, especially very shortly after recruitment, because people who come to a job through a temporary agency usually do so because they do not have the same experience and competence in that job as permanent staff. The survey asked how long a period the Bill should require, if it came into force, before the terms and conditions applied. Its findings were interesting. Some 26 per cent. thought that they should apply after one year of service, and 27 per cent. thought that they should never do so. If we ever introduce this or a similar Bill, employers' views on the timing of pay and contracts of employment conditions are clear: they should apply after a minimum of one year's service.

Christopher Chope: In the comprehensive survey of employers, is any mention made of the significance of employing temporary and agency workers for delivering our Olympic bid in 2012? The bid cannot be delivered without a very large number of temporary and agency workers.

Philip Davies: My hon. Friend is right, but I do not happen to have the figures to hand. The Government tell us constantly that every part of the country and people in every constituency will benefit from the Olympics. I am not entirely sure how the people of Shipley will benefit; the Minister has not yet explained that to me.
	We are always being told of the great benefits of the Olympics. One of those benefits is that people will get contracts to build all the sites required. As my hon. Friend says, that will no doubt involve workers on temporary contracts who may well be paid differently from permanent employees in such businesses. In fact, because of the time scales involved and the Olympics' importance to this country, those people may be paid more than permanent employees of the firms bidding for the work, because their expertise will be in such short supply. We should not think that agency and temporary workers are always paid less than permanent employees of the same firm. Often they are paid more.

Christopher Chope: Does my hon. Friend accept that a large pool of temporary and agency workers will enable the Olympic Delivery Authority not to be held to ransom by contractors who say that they have only a limited number of permanent employees?

Philip Davies: My hon. Friend is right. He will know as well as anybody that the cost to the taxpayer of the Olympic games has risen at an alarming rate, and we still have four years to go. The last thing that we need is a Bill such as this, which might well lead to taxpayers having to dig even deeper into their pockets to fund the Olympic project. He makes a very good point in raising the issue of the Olympics.

Nigel Evans: Scarce skills will be necessary to deliver a project as gigantic as the Olympic games and the only thing more embarrassing than the escalating cost of the games would be if we were unable to deliver on time. Agency workers will be invaluable to ensuring that the Olympic games take place in London in 2012.

Philip Davies: My hon. Friend is right. Without agency workers, the games could probably not be delivered on time. The Government tell us how important the Olympic games are to Britain, and I support the games coming to Britain, but it is essential that we make the use of temporary workers attractive.
	The survey reveals a spread of opinion on the impact of the agency workers directive if it were implemented in the UK. Employers were asked about the overall impact of the directive, which, as we all know, is the forerunner of the Bill. Only 17 per cent. thought that the impact would be positive, whereas 37 per cent. said that they knew already that it would have a negative impact on their business. Of the employers who took a negative view, 61 per cent. expected upward pressure on pay and benefits packages. That might be what the hon. Member for Ellesmere Port and Neston aims to achieve through his Bill, but this country's police officers, teachers and nurses are probably fed up to the back teeth of hearing the Government stress the importance of pay restraint to avoid rampant inflation, so it seems bizarre that when Government Members are telling police officers, teachers and nurses that they cannot have the pay rises to which they are entitled in one go because that would create inflation, and 61 per cent. of those who think the directive will cause problems say that one of those problems will be upward pressure on pay and benefits packages, they are so willing to support the Bill. Will the Minister calculate the likely impact on inflation if the Bill is enacted and people's pay is increased by more than the businesses employing them can afford?
	In that survey, 29 per cent. of respondents said that they expected it to be less likely that agency temps would be hired as permanent employees. The Bill's promoter is trying to get agency workers the same employment rights as permanent employees. Now, when such workers become permanent employees, they get those benefits, but 29 per cent. of employers are saying that the Bill would make it less likely that agency temps would ever become permanent employees. He would therefore deprive those workers of the benefits that he is trying to give them.
	Almost half—47 per cent.—of the employers responding to the survey said that the directive would make hiring agency temps more bureaucratic. As we know, businesses already face far too much bureaucracy. For companies such as Asda, which I used to work for, bureaucracy, while annoying, is not disastrous, because they can afford to employ people to go through and ensure compliance with all the directives and bureaucracy—it is meat and drink to them. Employing such people takes up only a small proportion of a big business's costs. However, for the many small employers that are the engine room of our economy—for small shopkeepers and other small businesses in our constituencies—expecting them to abide by more bureaucracy, legislation and rules is simply unrealistic. They spend long enough hours managing their own business and keeping it going. Many small business men work very long hours for little reward to keep people in employment, and many keep workers that they really cannot afford to keep because they are loyal to their employees. Imposing further costs and burdens on them would be a terrible crime and certainly lead to lots of small businesses closing in our constituencies.
	Employers think that the agency workers directive will have an impact on their recruitment strategy. It is important that we look at the various sectors. Of employers in manufacturing and production, 47 per cent. say that the directive would have a negative impact on their recruitment strategy—they would recruit fewer people as a result. We often talk about how we need to support manufacturing and how nice it would be to grow our manufacturing base. This Bill would do more than anything to undermine our manufacturing businesses and base. The survey shows that 34 per cent. of private sector service companies said that they would recruit fewer people; 42 per cent. of public service companies said the same; and the figure was 32 per cent. in the voluntary sector. Clearly, that would have a devastating effect on employment and recruitment.
	Employers believe that the Bill would have a slightly different effect in different areas of the country. It is no surprise that the biggest impact would be in London and the south-east. In London, 44 per cent. of employers said that the Bill would have a negative impact on their recruitment strategy. In my area of Yorkshire and the Humber, 39 per cent. said that it would have a negative effect on recruitment strategy, and I certainly do not want to support a Bill when 39 per cent. of the organisations surveyed in my own area, which employ my constituents, say that they would employ fewer people as a result. Labour Members should think long and hard about the Bill's impact on employment among their constituents in their constituencies. How would they explain that their constituents were out of work because of a piece of legislation that Labour MPs had themselves passed?

Christopher Chope: Is not that particularly important when we seem to be going into a downturn, possibly a recession? A report in today's  Financial Times suggests that UK growth will be well below 2 per cent. next year. It predicts that we will have increased inflation and less employment.

Philip Davies: In his customary fashion, my hon. Friend makes a powerful point.
	It is important to note that the survey of employers on their response to agency workers legislation and the agency workers directive revealed that 68 per cent. believed that they would recruit fewer agency workers as a result. When asked whether they would recruit more permanent workers, shifting the emphasis away, only 32 per cent. said that they would recruit more. Inevitably, then, if this Bill is passed, people who have a job at the moment will be kicked out of it with very little prospect of somebody else taking them on. It is clear that that would happen if the Bill were to become an Act.
	It is all very well for us to pass legislation that we think is well-meaning and will go down well with our unions at our union branch meetings and all the rest of it. However, we need to think about the individuals who currently have a job and are quite happy doing it under their present terms and conditions. If we are not careful, those of us here who are unhappy for those workers will end up putting them out of work because the idea of this Bill goes down well at a union branch meeting. That, to me, is totally and utterly unacceptable. I certainly do not want to be party to any Bill that will lead to some of my constituents who are in a job and enjoying it being put out of that job as a result.
	Another problem of the directive is how it would affect productivity. Far more employers believe that this would have a negative effect on productivity in the workplace than believe it would bring benefits to the workplace.
	I am aware that time is moving on and I certainly do not wish to take up too much of the House's time, but I would like to mention some of the concerns raised by the Recruitment and Employment Confederation. It too did a survey, finding that 84 per cent. of agency workers were satisfied with their assignments and that only 9 per cent. were dissatisfied. Furthermore, 66 per cent. of agency workers are satisfied with their pay, which is up from 56 per cent. last year. More and more agency workers are actually satisfied with their pay. Only 23 per cent. are dissatisfied. A large number—38 per cent.—said that they were not even looking for permanent work, which is a rise of 6 per cent. on the last quarter.
	It seems to me therefore that this Bill is actually a solution looking for a problem. Lots of employers are very happy with the current arrangements for employing agency workers, because they suit their needs and help their businesses grow. Many temporary workers are happy with their pay and conditions already, without any intervention from Government Members. Many people are being given opportunities that they would otherwise never get, and many people will be in work as a result of current arrangements, when they would otherwise not be. We tinker with the state of play at our peril. We all know that the Bill will cause job losses. I did not come to this House to introduce legislation that costs people their jobs. I came here to try to create a thriving economy that puts more people in employment and creates more wealth for this country, but the Bill will have the opposite effect. The Government know that the Bill will have a negative effect on employers, and I urge them to have the courage of their convictions and vote against it on Second Reading.

Christopher Chope: The frustration that I felt in waiting so long to be called has been more than compensated for by the quality of the contribution by my hon. Friend the Member for Shipley (Philip Davies). It is vitally significant that he has put on the record the views of employers. He curtailed his remarks, because he was going to tell us a lot more about the attitude of temporary workers and agency workers. Perhaps it will interest Labour Members if I pick up my hon. Friend's point that 66 per cent. of agency workers are satisfied with their pay—I am not sure whether 66 per cent. of MPs are satisfied with their pay—which indicates the high level of satisfaction among agency workers.
	I declare an interest, because I employ a gap-year student on a temporary employment contract. I pay that student well in excess of the minimum wage and comply with all national regulations. It would ridiculous to say that MPs or others cannot take on gap-year students as temporary employees. My constituents and I have significantly benefited from the work of that particular employee and others whom I have previously employed in similar positions.
	Although I congratulate the hon. Member for Ellesmere Port and Neston (Andrew Miller) on having chosen this subject following his success in the ballot, I am concerned that he couples his position as the promoter of the Bill with being the Chairman of the Regulatory Reform Committee, which I suspect entails a conflict of interest. This Bill is highly regulatory. Indeed, the fact that the Government are not enthusiastic shows that it must be an incredibly highly regulatory measure, because they normally go along with regulation.
	Many hon. Members support the Bill, and, perhaps in defiance of the Government Whip, they have signed early-day motion 692, in the terms of which lies the fallacy of their position. Early-day motion 692 states that
	"there are 1.4 million agency workers in the UK"
	and points out
	"that many new jobs are considered temporary and are often filled by agency staff; recognises that such staff are often used to cope with fluctuations in demand and form a legitimate part of the labour market",
	which is fine. However, it goes on to say
	"that they are subjected to inferior pay and conditions and blatant exploitation".
	According to early-day motion 692, the 1.4 million agency workers are all subject to inferior pay and conditions and blatant exploitation. We know from the evidence provided by organisations on all sides of the argument that the proportion of agency workers and temporary workers who are subject to exploitation is smaller than the proportion of permanent employees who experience that condition. Early-day motion 692 immensely exaggerates the problem.
	The motion
	"further recognises that agency workers are sometimes employed to undercut permanent workforces".
	At least, that is more moderate language, because of the use of the word "sometimes", although I do not know whether that means 50, 100 or 1 million times, given that there are 1.4 million agency workers—but I do not quarrel with the use of that word. However, the early-day motion overstates the case when it refers to "divisive conditions and resentment".
	The motion then
	"calls on the Government to take appropriate action to establish the principle of equal pay and conditions for agency workers compared with their permanent counterparts."
	That is why this is such a significant debate, because we are considering the issue not just in terms of whether the Government should support the Bill, but in the context of what is happening in Europe. Unfortunately, when the Government removed the UK's opt-out from the social chapter, they opened our country up to regulation by the European Union on the basis of majority voting. We have often found that our particular circumstances governing employment in this country are at odds with what happens on the continent. We have found that the imposition of the 48-hour working time directive has had perverse consequences in our labour market, probably including being partly responsible for an increase, following a period of decline, in the number of agency and temporary workers employed in the UK economy in the last two years.

Philip Davies: My hon. Friend is making a powerful point. Does he agree that the competitive advantage that the UK has always traditionally had over lots of EU countries has been eroded by this kind of legislation being inflicted upon us in the same way as it has always been inflicted upon those other countries? Not allowing people to work more than 48 hours might be well-meaning, but it often works against the wishes of the employees. Sometimes they wish to work longer hours. Such legislation works against their interests.

Madam Deputy Speaker: Order. The hon. Gentleman must keep to the terms of the Bill before us.

Christopher Chope: I am grateful to you, Madam Deputy Speaker, and I am grateful to my hon. Friend for his intervention. The core of all this is sovereignty. Why should not we in the United Kingdom Parliament decide what terms and conditions should be imposed and what terms and conditions should be freely negotiated between willing employers and willing employees in the UK labour market? My inclination is to be on the side of the right-to-work campaign. Emphasising the other side of the argument, which places a lot of regulations and burdens on employers, often has the perverse consequence of denying people who have a natural disadvantage in the labour market the opportunity to exercise their own right to work and to choose their own terms and conditions. That regulatory burden is one of the main contributors to the fact that 2 million people, including 1 million in the younger age group, are unemployed. They are not unemployable, but it will be very difficult to get many of them back into the labour market unless we introduce more flexibility rather than reduce flexibility, which is the purpose behind the Bill.
	I understand that the Minister has to face up to the reality of an enormous split in the Labour party on this issue. He knows that as we approach a general election the resources of the trade unions will be vital, and that, if the Government do not deliver on the Warwick agreement, they will be in trouble as far as those resources are concerned. Even he has recognised that we cannot just throw in the towel to appease the trade unions under the Warwick agreement if that will cause a disaster for the UK economy. For many months, the Minister and the Government have stood out against this Bill and its predecessor and stood out against the ill-conceived European regulation covering the same subject. However, right at the end of the Minister's speech, during which he refused to take any interventions, and after setting out in great detail all the Bill's shortcomings, he said that the Government would not actually vote against it. It is disappointing that they do not have the courage of their convictions. It would be better for them to be seen to be going down fighting on behalf of the United Kingdom's flexible labour market. That would have sent a strong message to our European so-called partners ahead of the negotiations on the directive. I fear that the way in which the Government are dealing with the Bill is showing them to be indecisive and the poodle of their backwoodsmen—and backwoodswomen, I imagine.
	The Minister especially criticised the Bill because it does not specify the moment at which equal treatment will be required for agency workers. However, he did not spell out the fact that because the Bill does not define that point—it was not defined in the similar Bill to which the Government objected on Fridays in the previous Session—the rights that it sets out would come into effect from the very moment that an agency worker was employed. No one in their right mind thinks that that proposal is sensible, but, interestingly, despite all the protracted negotiations that preceded the Bill's publication, the promoter and sponsors of the Bill have not tried to introduce a figure to meet the Government's objection. The Bill is fundamentally flawed for that reason, if for no other.
	I applaud what my hon. Friend the Member for Wealden (Charles Hendry) has said from the Front Bench. These days, the Conservative party is sometimes accused of being rather wishy-washy—albeit not as wishy-washy as the Liberal Democrats—and of sitting on the fence. Journalists on  The Daily Telegraph and  The Sunday Telegraph, and elsewhere, think that we are especially wishy-washy on taxation and public expenditure. However, leaving that aside, I welcome the fact that we are not wishy-washy on this Bill. I doubt that we will be able to muster sufficient numbers to defeat the Bill on Second Reading—we will find out whether the Liberal Democrats vote for the Bill or abstain, as the hon. Member for North Southwark and Bermondsey (Simon Hughes) indicated that they would—but it is more important to be right than to go along with the majority.
	During my time in the House, I have always been interested in defending minority rights. Agency and temporary workers are in a minority—that goes without saying. Their rights are important. Individuals who are out of work have a right to test out different types of work through different employers via the use of agencies, or job brokers, as they are increasingly called.
	The Department for Work and Pensions is setting up a network of job brokers, some of which will be encouraging employers to take on temporary staff and giving them temporary subsidies so that they can take on those staff. That will happen in recognition of the fact that the value to an employer and work force of an individual taken on in such circumstances is not as great as the minimum wage that must be paid. Such a proposal is a welcome introduction of flexibility and a way of avoiding the rigid consequences of the minimum wage legislation, which many Conservative Members criticised when it was introduced. The minimum wage has now been increased across the country to a level that puts employers in a position whereby they cannot afford to take on the inexperienced or those without much recent time in work without some sort of subsidy. The Government recognise that in the job-broking system, and that is a way forward. However, it is at odds with their approach to this Bill: they do not like it, but do not have the courage of their convictions to vote against it. At a time when our economy is entering, if not a crisis, a period of significant downturn, with the prospects for growth far below what has been forecast by the Government, organisations outside the House will want to see whether Parliament is on their side in ensuring that we get a more flexible labour market and that we do not put more people out of work.
	At a time when many of us are thinking about the implications of the Olympic games for our country, the points made about the Olympic Delivery Authority are pertinent. It is inconceivable that all the people who will work on the Olympic games, which will take place over a concertina period of three or four weeks, should be employed permanently. It would be ludicrous to say that. I suspect that some people who would have been taken on for four-year fixed-term contracts have not been taken on because we have not quite got to the four-year trigger point.
	The legislation to implement the regulations on permanent workers, on which the Bill is modelled, introduced a rigidity into the employment market. If someone is on a fixed-term contract of more than four years from 2002, that person is deemed to be on a non-fixed-term contract as soon as the contract reaches four years and, on the termination of that employment, is entitled to compensation for loss of office, to redundancy pay and so on. We have seen the consequences of that in the case of some chief executives of local authorities who were employed on fixed-term contacts on the basis that that would give them a higher salary. However, when the fixed-term contract has expired, they have still been entitled to severance or redundancy money because of the four-year rule.

Philip Davies: My hon. Friend makes a powerful point. Does he agree that if temporary workers have to be given the same pay and employment rights as permanent workers, the same argument can be used the other way around? Given that the time scale for the Olympics means that people will probably be paid more as temporary workers because of their skills, which will be used for a short period of time, the argument will be that permanent staff should be paid the same amount.

Christopher Chope: My hon. Friend is on to a good point. Again, it is another reason why the Bill as drafted is wholly inadequate and unsatisfactory.
	It is regrettable that there are no explanatory notes. I notice that the next Bill for discussion does not have any explanatory notes either. I do not know whether that is because this Bill's promoter thinks that it is self-explanatory or whether he wishes to keep people in the dark. It is customary for Bills to have explanatory notes. Indeed, I think it is obligatory, under the rules of the House, for Government Bills to have them. In the absence of explanatory notes, one has to speculate about the meaning of some of the expressions in the Bill.
	My understanding is that it introduces three new rights for temporary and agency workers under clauses 1(1), 3(1) and 3(4). I am not going to go through the Bill line by line, as we were promised we would be allowed to do with the European constitutional treaty. Certainly, Madam Deputy Speaker, you would not allow me to go through this Bill day by day, as the Prime Minister said that we would go through the European Union (Amendment) Bill. I would, however, like to highlight one or two provisions that should be tightened up in Committee should this Bill be given a Second Reading.
	As has been said, clause 1(2)(b) does not define the "objective grounds" to which it refers. In clause 1(3), "pro rata temporis"—the meaning of that phrase will be familiar to anyone who did Latin at school or university, but not to others—would not cover overtime. That is a good point in the Bill, in comparison with the European Union directive, and it is a pity that the Minister did not highlight it. That is a positive feature, but vague language is deployed in clause 2, particularly in subsection (1)(b), which uses the expressions, "broadly similar", "having regard", "where relevant", "seniority", "similar level" and "qualifications and skills". There is no reference, however, to age or experience. All those vague concepts are used to try to derive a comparator, which under the provisions of clause 2 could be a hypothetical person, which is quite ludicrous.
	The Union of Industrial and Employers Confederations of Europe consistently argued against giving rights to individual agency and temporary workers that would enable them to access the terms and conditions of permanent staff. I do not think that the employers are wrong: it is perfectly reasonable that terms and conditions of employment in individual contracts should remain a private matter between the employer and the employee. That is a particularly significant factor in the UK, where most contracts of employment are with the individual, as opposed to the collective basis often used on the continent.
	The rights given by clause 3(1) would impose a particularly onerous burden on employers, as their existing contracting terms that prevented someone from becoming a permanent employee would be made void. If an employer had a policy or an agreement with trade unions that temporary workers could not be taken on as employees, such a condition would be null and void . What is the point of that? It is unnecessarily oppressive and regulatory, and it discriminates against the rights of individuals to reach agreements based on their assessment of what is in their best interest.
	Clause 3(4) states:
	"An agency worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, of the end user or the employment business, or employment agency, done on a ground specified in subsection (5)"
	That is a serious issue, which will create a substantial burden for employers, and runs counter to the principle of privacy of contract.

Philip Davies: My hon. Friend makes a powerful point. We know that the Labour party is pushing the Bill as a payback for the Warwick agreement and the money given at the last general election, but what does my hon. Friend think is in this for the unions? Is this not about not what is in the best interests of temporary workers, but the fact that very few temporary workers are members of trade unions, so the unions want the temporary working arrangements in this country to be undermined to boost their flagging membership rates?

Christopher Chope: Absolutely; my hon. Friend is on to the real point that trade union membership has been declining and the unions would like to be able to access a new cohort of potential members. That is really what underlies this, because with membership comes money, and with membership and money comes more influence in the Labour party and over the Government. We have seen examples recently of the consequences of that for the Great British people.
	The issue of detriment in clause 3(4) is serious, and that is another reason why employers are so concerned about the Bill.
	One has to take a deep breath when one realises that clause 4 is promoted by the Chairman of the Regulatory Reform Committee. It talks about
	"the appointment of a regulatory authority with suitable duties and powers for the purpose of enforcing the rights afforded to agency workers",
	and
	"the appointment of statutory officers with suitable duties and powers"
	and so on, and "alternative dispute resolution", but with matters ultimately going to an employment tribunal. We know about the costs and delays in the employment tribunal process.
	We also know how employers, particularly small employers, are held to ransom by the threat of cases being taken to the employment tribunal. Were the Bill to be enacted, it would only need a temporary or agency worker even to suggest that they would take the issue to an employment tribunal for the small employer to quake in his boots and say, "Well, I can't possibly face the costs that might be involved in going to a tribunal, in terms of my time and that of other employees who might have to give evidence; I certainly can't afford to employ counsel or solicitors to make representations on our behalf; and I certainly can't afford all the delays and hassle in preparing the case." Therefore, as so often happens, the threat is made by an employee and the case is settled and the employee goes away with some money, often quite a large sum of money, on the basis that the employer feels that it is better to pay a lump sum to get rid of the problem than to defend rights in the tribunal.

Philip Davies: My hon. Friend is entirely right, but that problem is not only faced by small employers. In my experience, many large employers face vexatious complaints with threats of employment tribunals and end up having to pay people, because it is often cheaper to pay them off than to defend the case at a tribunal. Big companies suffer from that just as much as small companies.

Christopher Chope: I am grateful to my hon. Friend for telling the House about that, because he has an enormous amount of experience of working for a big company. In a sense, there is an analogy between what happens with regard to an employment tribunal and what is happening today with the Government. In the face of the threat of defeat by their own Back Benchers, the Government have given in, even though they had right on their side. That is exactly the problem confronting employers when faced with a tribunal. They have right on their side, but the pressure is on them to appease and to give into those who do not have right on their side. Therefore, these provisions will add to costs, delays and uncertainties.
	As has been said already by a number of contributors to the debate, the law of unintended consequences will come to apply in a big way. Often in the House, we pass regulatory measures and find that the consequences in the real world are rather different from what we expected, but in this case we know what the consequences will be, because they have been flagged up by employers across the country, both large and small: there will be fewer opportunities in the workplace for temporary and agency workers, and fewer opportunities for those who are not currently in work. The result will be bad for those individuals and for the least able people in our society: the people we want to help most—certainly those whom we on the Conservatives Benches want to help most.

Philip Davies: We are united in our opposition to this Bill and hope that it does not come into effect, but if a Bill of this nature were enacted, what qualifying period should there be before the equal rights of temporary workers took effect? I said, as many employers do, that at least a year should go by before such workers are considered for the same employment rights. Will my hon. Friend share with the House what he thinks about that matter?

Christopher Chope: My hon. Friend asks me my opinion. I think that one year is the absolute minimum. One year is the period before the unfair dismissal rights come in under permanent employment— [Interruption.]

Madam Deputy Speaker: Order. There are rather a lot of private conversations breaking out in the Chamber.

Christopher Chope: I am not put off by private conversations in the Chamber, although obviously they are out of order. However, at a time when this House is increasingly regarded as an irrelevance to our national life, such behaviour sets a very poor example to those who may be watching our proceedings on television. This week, as you will know Madam Deputy Speaker, quite a lot of schoolchildren are on half term. Instead of watching their Gameboys, perhaps they are watching the Parliament channel.

Madam Deputy Speaker: Order. I hope that if they are watching that channel they will hear a contribution to the debate about the Bill that is under consideration.

Christopher Chope: I hope, and indeed the record will show, Madam Deputy Speaker, because you have not called me to order, that for 32 minutes my contribution has been pertinent and in order, as were those of my hon. Friends. Does the hon. Member for Great Grimsby (Mr. Mitchell) wish to intervene?

Austin Mitchell: indicated dissent.

Christopher Chope: He does not. Perhaps the thought of all these schoolchildren being able to watch him on television will cause him to rise to his feet so that he can be identified.
	I will not dwell on that matter any more, but the time scale and the view that a minimum period of one year should pass before the legislation comes into play is important. My view is that even one year would be too short a period, because that would create a cliff face. It may result in a large number of agency and temporary workers who have been employed for 11 months finding that their contract has come to an end, not because they are not up to the job or not providing a good service to their employers, but because the employers do not wish to take the risk of effectively taking them on as permanent employees. Therefore, my answer is that I think that a period far in excess of one year would be appropriate.
	I hope that the promoter of the Bill will respond to the debate, particularly on this issue. The commission has been suggested by the Government as a vehicle to avoid having to face up to what the Bill demands head on. I would be grateful to the promoter of the Bill if, when he winds up the debate, he is able to tell us how he envisages the time scale for that commission working.

Andrew Dismore: rose in his place and claimed to move, That the Question be now put.
	 Question put, That the Question be now put :—
	 The House proceeded to a Division.

Madam Deputy Speaker: I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 157, Noes 9.

Question accordingly agreed to.
	 Question put accordingly, That the Bill be now read a Second time:—
	 The House divided: Ayes 147, Noes 11.

Question accordingly agreed to.
	 Bill read a Second time, and committed to a Public Bill Committee, pursuant to Standing Order No. 63 (Committal of bills not subject to a programme order.)

Leasehold Reform Bill

Order for Second Reading read.

Simon Hughes: I beg to move, That the Bill be now read a Second time.  [ Interruption. ]

Madam Deputy Speaker: Order. Will those Members who are not staying for this debate please leave the Chamber as quickly and quietly as possible?

Simon Hughes: Thank you, Madam Deputy Speaker. This is a bit like one of those afternoons on Wimbledon's centre court when the main match has finished and people leave to do other things—including, I gather, a well-deserved photocall on the front steps for the supporters of the previous Bill.
	We now move on to something no less important, which has an effect on no fewer people. I have the honour and privilege to propose the Leasehold Reform Bill, which is designed to reform the law affecting people who have bought their properties from local authorities—an issue that matters hugely to that group of people ever since the right to buy first came into play under Mrs. Thatcher in the 1980s.

Andrew Dismore: Will the hon. Gentleman give way?

Simon Hughes: Not yet.
	I have been in this place for nearly 25 years, which people may think is a good or bad thing. I have applied every year in the ballot for private Members' Bills, but this is the first time that I have succeeded and I am very grateful that I have got there at last. The paradox is that this was the first year in which someone else—none other than my right hon. Friend the Member for Sheffield, Hallam (Mr. Clegg)—actually signed the book for me because I could not be here on that day. I am doubly grateful for my right hon. Friend's intervention, without which the Bill would not be before us. I am grateful to him and other co-sponsors: the subject of the Bill is a live issue in all their constituencies.
	Let me explain the numbers affected in a borough such as mine. I am one of three MPs for the borough of Southwark: the Leader of the House of Commons, the right hon. and learned Member for Camberwell and Peckham (Ms Harman), represents the middle section and the Minister for London, the right hon. Member for Dulwich and West Norwood (Tessa Jowell), represents the southern part, along with part of Lambeth. The figures from the local authority suggest that Southwark has 41,000 council tenants, that 1,300 have bought their property from the council and are now freeholders, and that there are 13,000 leaseholders. Hence 13,000 Southwark council leaseholders are affected, and in addition a significant number of people in my constituency area have bought their properties from the City of London corporation, as Southwark contains a significant number of City of London corporation properties.
	That provides an idea of the numbers of people with leasehold properties in many inner London authorities, but there are significant numbers in many other urban areas, and obviously smaller numbers in authorities with less municipally owned housing stock in the first place. That shows the scale of the potential constituency of people affected by these matters. That is why, over the years, colleagues in all parts of the House have raised leasehold issues on the Adjournment, in parliamentary questions and in debates on legislation.

Andrew Dismore: The hon. Gentleman refers to the numbers in inner London, but I can certainly tell him that the numbers may be even greater in outer London, where the boroughs are geographically large and had more council housing to start with. I believe that his Bill raises some important points. I know from my own casework that leasehold charges are a matter of great concern to many council tenants—or former council tenants, I should say—who feel that in the London borough of Barnet, for example, the arm's length management organisation, Barnet Homes, has not treated them fairly, particularly when very large bills for tens of thousands of pounds come through the door.

Simon Hughes: I am grateful for that. I was not in any way trying to suggest that the hon. Gentleman's borough or many other local authorities do not have huge issues. He is absolutely right to reflect those concerns, as indeed the hon. Member for Beckenham (Mrs. Lait), who is on the Conservative Front Bench today, has done over the years. Regularly attending our constituency surgeries are council leaseholders, leaseholders from the organisations that succeeded the local authority in managing the housing stock, and members of housing associations.
	The force of the Bill's potential implications was brought home to me most when, some time ago, a pensioner couple who had just managed to get some money together to buy a very small City of London corporation flat on the well-maintained Avondale estate on the Old Kent road came to me with a bill of £27,000. They probably did not have even £1,000 savings, let alone £27,000. Eventually, after long negotiations, we managed to get it down to about £11,000, but even so, that was the charge they had to pay.
	When people consider security in a tenanted property, many of them understandably think that it may be better to acquire ownership, as far as they can—it is not freehold ownership; it is long leasehold ownership, which involves a lease of 21 years, 99 years or whatever. Their families often encourage them to do that and may assist in the process, so it is a perfectly natural position for someone to find themselves in.
	Having arrived in this place not long before the Landlord and Tenant Act 1985 was enacted, I have the sense that people were not given good advice on the implications of leases from the beginning. As the Minister for Housing knows—I apologise for not welcoming her earlier not only to the Front Bench, but to her new responsibilities—leases have changed and councils have evolved. Although leases are now standard word-processed forms, they have changed as issues have been identified. For example, the important point that the word "reasonable" in the lease means "reasonable" as perceived by the local authority within a wide range of possibilities, as opposed to what the tenant buying the flat might perceive to be reasonable, was often not explained to prospective purchasers.
	I want to deal with the general situation before turning to the main proposals in the Bill. The Bill seeks to put leaseholders at the heart of the decision-making process for major works on their properties. For the first time, it offers leaseholders a significant chance of having a real say in who does such work and how and when it is done, and I will return to the implications of that statement in a second.
	The Bill tries to deal with the fact that people are often given bills amounting to £1,000 a month or more, once works have been agreed. People feel that they have little say over that process. That is a bigger issue in the context of a perfectly reasonable Government policy, which is to insist that all social rented property conforms to the decent homes standard by the end of this decade. That is a perfectly good policy. As you know from your constituency, Madam Deputy Speaker, and as we all know from ours, the consequence of that policy is that councils review all their housing stock and decide on major programmes of work to get to the decent homes standard by the end of this decade. If the occupants are tenants, they are protected, because their weekly rental cost will not change fundamentally and the money for works will come from the council's housing account, which is ring-fenced. However, the council has a duty to the council tax payer, the housing revenue account and its tenants to make sure that the leaseholders pay their fair share, so it must collect the money from them, and— whether the work involves roofing, a new water tank, plumbing, central heating, radiators or windows—it cannot in law differentiate between tenants and leaseholders. The council therefore cannot easily use a contract that states, "Only do the tenants. Do not do the leaseholders." Sometimes, it decides under the decent homes initiative that it will install new windows and new doors for the whole block, but some of the people who have bought their property have just replaced their windows and doors. Not surprisingly, such people say, "Hang on a minute. I have just spent a lot of money, thank you very much. Why should I now have to spend money on something that I do not need?" That is the context.
	Since the decent homes policy was implemented, those bills have become higher. Some important evidence was presented to the Communities and Local Government Committee one-day hearing on 5 March last year, not least by Mr. Tony Essien of the Leasehold Advisory Service, whom I have met—he is extremely impressive and well informed—to confirm the fact that the issue has become much more financially acute since the decent homes standard has been on the agenda. The issue is as much about the question, "Can I afford the bill?", as it is about the nature of the work.
	Ways have been developed to assist leaseholders with financing such bills. If the council has the money to buy back the property, it may do so, but there is no legal possibility of, for example, the council buying back half the property, which would allow people to become shared owners in the same way as other people are shared owners in the private sector, which would mean that people would carry half the burden rather than the whole burden. Again, people are acutely aware that that is an option that they would like to have.
	The Bill also specifically seeks to place a limit on the monthly charge that someone could be required to pay to their local authority for works to be done. I realise that that means that the council might not get its money back as quickly as it would like, but it is reasonable to have an upper monthly limit. People who buy now or have bought in the past would know what their potential maximum outgoings would be. With the best will in the world, when people are suddenly hit by a proposal for major works and a huge bill that runs into five figures, the likelihood of some of them—single people, the unemployed or a retired couple—being able to find the necessary capital funds or borrowing might be very reduced indeed. The older one is, the more difficult it is to do that. The same applies if someone is not earning.
	The other specific proposal relates to what in the Bill are called "sinking funds". Sinking funds used quite commonly to be held by councils. Someone would buy a council place and they paid into a fund. A court case involving my borough some years ago effectively put an end to general sinking funds, which enabled people to anticipate costs and put the money in up front so it would be available for a rainy day. I would like us to be able to set up in law an individual sinking fund or individual deposit account. When someone buys, they will be able to have a fund to do with their property and on which they can draw if that becomes necessary. It is much easier to put something by for 10 years so that one can meet at least half the cost than it is suddenly to find that one does not have any funds at all.

Dari Taylor: This is an extremely complex issue, and the hon. Gentleman's speech has made clear just how great the complexities are. I am quite shaky about supporting the Bill because it is such a complex issue. He spoke about halving the burden and examining how share ownership could become a factor so that tenants would own half and the local authority would own half a property. That sounds a sensible way forward, but my concern is that having a 50 per cent. buy-out on potentially 13,000 leasehold properties would require a staggering amount of money. Where is that finance going to come from?

Simon Hughes: Many of the hon. Lady's constituents will have bought their own property. Knowing the housing stock in her part of the world, I believe that there may be relatively more freeholders than there are in London, and the answer to her question is that most people will not avail themselves of the provision. I have been very careful to keep the propositions in the Bill as simple as possible, and where necessary to make them outline—in other words, to give the Government the power to introduce detailed regulations after consultation with everybody. That is to deal with the complexities and technicalities. The law is difficult and there has been law in this area since the early 1980s. I accept entirely that the practice is quite complicated.
	It is helpful to respond to the hon. Lady's points, so I shall list the issues that people have brought to me recently and that I seek to deal with in the Bill. I will do that so that everybody here and outside can understand what the proposals are. They can then come to a judgment on them. I have collected the comments made to me in the past few months about the unfairnesses of the current system. Those comments were made by people who have bought from my local authority—it tries to do the job well, and the man in charge, Mr. Green, is an excellent and competent local government officer to whom I pay tribute—or by those who are tenants of the City of London, which also has a well-run housing department.
	A family from the Dickens estate made the point that there should be a limit to the increase in annual service charges. A family from the Rouel road estate in Bermondsey said that there should be some sort of means-testing or discounted service charges for single occupants. Again, they were worried about the cost. A family living on the Jamaica road in the middle of Bermondsey said that there should be a discount on service charges for pensioners and people on low incomes—again, that was a worry about costs. Another family on the Dickens estate said that consultation should be meaningful, rather than a process of just issuing letters. That is a common theme, and people say, "If you're going to consult us, act on what we tell you." That family made the further important point, which is covered in the Bill, that a quick, local arbitration service for leasehold disputes would be welcome. They say that the leasehold valuation tribunal—it does a good job nationally, and while it can work regionally, it is a national body—is
	"expensive and takes too much time, effort and legal knowledge".
	A family on the Old Kent road said:
	"Councils should be obliged to publish their annual service charges...The definition of consultation is not clear and normally becomes 'information' rather than 'consultation'. There doesn't seem to be an obligation to take into account leaseholders' responses other than to respond in writing...Councils should have to prove that they have got the best deals rather than the onus being on the leaseholder to find a better deal...This is not just about tendering as the actual specification that the council gives for work needs to be as basic as possible in the first place (a Ford Mondeo rather than a Rolls Royce specification)."
	A family living in an estate off the Old Kent road whom I have dealt with throughout my time as an MP say that councils should have to keep records of agreements, services and works that affect leaseholders, because one often has to go back to check the work of six, seven or eight years ago to know whether further work suggested by the council is justified. A family up by the Elephant and Castle said that consultation was still not effective enough, while a family from outside my constituency who had heard about the Bill said that it would be really good if decisions of the leasehold valuation tribunal were binding on the local authority affected by them, so that people would not have to argue the case all over again.
	I have tried to set out a response to such comments in four substantive clauses. Clause 1, "Involvement of tenants in decisions on works", is a replacement provision, so this clause is not all new law. It replaces section 20ZA(5) of the Landlord and Tenant Act 1985. Proposed new subsection (5)(d) is a new provision that would require consultation on specifications in addition to tenders.

Richard Younger-Ross: My hon. Friend makes a good point. He is highlighting a problem that affects even rural Devon, where we have a small number of flats. Maintenance, including planned maintenance, seems to be a key problem. My background is in architecture, and I know that we now look at maintenance programmes over five years. Should not local authorities be negotiating with tenants on a long-term rolling programme so that people not only understand that a lift or roof might need replacing in five years' time, but have an idea of future costs, rather than just the costs for the following year?

Simon Hughes: That is an extremely good idea. Since the Minister for Housing took up her job, she might have become aware that this big issue needs to be addressed. At the moment, local authorities can seek dispensation from the requirements of consulting on specific works when they have a long-term contract with somebody who has worked on a estate for a long time. More and more cases are subject to requests for dispensation. They are not covered by the normal process of consultation on works and there is no framework to cover them. Many local authorities prefer to enter into such long-term contracts, but we have as yet no legal framework to make them work well for the leaseholder. My hon. Friend is absolutely right that it would be better if people knew about the likely work over 10 or 20 years so that they could budget accordingly.
	Clause 2 would amend the Housing Act 1985 to provide that consultation should take place with tenants on not only a local council's idea—replacing a roof, for example—but a proposed Government policy, such as that on decent homes. It is no good being consulted only after Government policy has been decided. People need to take a view when the Government are formulating a policy that might require local authorities to do lots more work than they might have planned.

Richard Younger-Ross: A further problem that people may face is that if an authority is stuck for cash in a year, it could try to defer maintenance works. If a property is not maintained properly, the costs can be greater later. Proper consultation would allow tenants to ensure that their property was properly maintained and not left to rot because the local authority was a bit strapped for cash.

Simon Hughes: That is another perfectly proper observation. Again, the Minister will know that the big debate is the context of the housing and revenue account and the money available, but there is also the question of how the council manages its dual obligation to ensure that property is maintained, as it is required to do for a tenant, which is in the tenancy agreement, and to fulfil its obligation to the leaseholder, as it is required to do when someone buys a flat, maisonette or house. If the council does not, for example, ensure that the tank in the roof holds water rather than leaks water, it is in breach of its obligation and can be taken to court. That would be a bigger bill for the council and would come out of the same pot.
	Proposed new subsection (5)(e) in clause 1 is a new proposal that would give more power to tenants. When the council comes along and says, "This is what we want to do," the proposal would allow leaseholders to make a counter-proposal if 25 per cent. of them get their act together sufficiently to agree on one. A ballot could then be held—provided, obviously, that the counter-proposal passed the technical tests of the specification of the tender—on whether people in the block wanted the counter-proposal or the original proposal. That would be determined by a majority.

Christopher Chope: Would consultation take place after the tender had been received? I can see the case for it before the tender, when there is the specification, and I can see the case for it if there is a proposal not to accept the lowest tender, but I cannot see the need for it otherwise.

Simon Hughes: It would clearly logically be before the tender. The hon. Gentleman is right. That is why it is described as being
	"in respect of proposed works".
	To put it in simple terms, the council might say, "This is what we are proposing to do. We are going to replace all the windows and doors and the roof." It would be nonsense if a single tenant could force a ballot on an alternative, but it would be different if a quarter of the residents—a small number in a small block, a big number in a big block—could say, "We don't need the windows or doors done. Yes, we need the roof and the other element done, and this is our proposal." If that counter-proposal won the day, we would be allowing people in the block to decide what work needed to be done, having heard the argument.
	The hon. Gentleman, like all colleagues in this place, makes judgments about what should be done in his home. Somebody who wants to buy his place might not make the same judgment. We all sometimes defer decisions on house maintenance because it is more convenient to do it later and we do not have the ready cash. That is normal human behaviour and applies just as much to people outside the House as inside it. We should all have the freedom to decide. I want to give people the power to drive the decision, rather than have it driven at them and imposed by the council, with no ability to do anything but make their observations and have the decision forced on them irrespective of their views.
	Proposed new subsection (5)(f) contains the proposal for the ballot. Paragraph (f)(iii) would allow the majority to decide the outcome. Proposed new paragraph (g) would require documents to be kept for 10 years. That is a practical issue. As I understand it, it is not the obligation at the moment. As a result of the cycle of major works, documents should be kept that long because they have to be available for a reasonable time.
	Proposed new paragraph (h) would allow for a local arbitration tribunal. Southwark has a good arbitration process for tenants, but we do not do leasehold arbitration. Under the Arbitration Act 1996, it should be possible to have local arbitration if everyone agrees to it. The point has been made to me strongly that it should be an independent arbitration tribunal. It should not be a local authority tribunal, but one on which the local authority and the leaseholder agree.
	Proposed new subsection (3) would limit the monthly instalments. I have said how important that is to residents in my constituency. If the bill is £12,000 or more, people should be able to insist on paying it in instalments. I had a discussion with the people who advised me—people in Southwark, Lease UK, and so on—and in the end I decided that it should be £250 a month maximum. Councils may say that we need more than that, but for many people, that is a considerable amount. There is no theology about that sum, but it is my best proposal.

Andrew Dismore: I am following the hon. Gentleman's analysis with interest. However, it is troubling, because it could saddle someone with a debt for four years and prevent them from moving on. Would it not be better to make provision in regulations, because if the measure were amended from time to time by regulation, we could take account of inflation, property prices and so on?

Simon Hughes: I would be happy with that arrangement. Stepping back from the detail of the measure, I had a brief word with the Minister yesterday. I am open to the notion that the debate should achieve the best outcome, and I am conscious that the Housing and Regeneration Bill, which runs in parallel, as it were, with my measure, is proceeding through Parliament. I urge the House to allow my Bill to go into Committee, so that we can develop that exchange. I am willing to accept that the matter would be better handled in regulations than in the Bill.
	Finally, clauses 3 and 4 provide for regulations, for that very reason. Clause 3 provides for a power to buy back under regulation. It could be a buy-back of 50 per cent., or of varying amounts. The system should not be complicated, as that is not what councils want. My instinct is that a buy-back of 50 per cent. is something with which councils would be willing to live, whereas a buy-back of varying proportions would be more difficult for them.

Shona McIsaac: Grimsby and Cleethorpes have an enormous number of leasehold properties, but mainly houses. I served on the Committee that considered the Commonhold and Leasehold Reform Act 2002. My understanding—and I hope that the hon. Gentleman can clarify this—is that in law, a leaseholder is another category of tenant. When he discusses the concept of buy-back, what is being bought back? I have grave reservations about leasehold as a form of tenure, and would rather get rid of it. People think that they are buying their home, but they are only buying the right to live in that property for a certain period of time. How does the Bill fit in with that arrangement? He has only discussed local authorities. How does his Bill cross over to people living in private blocks of flats where major works are undertaken?

Simon Hughes: The hon. Lady has opened a can of worms. I know more about housing in Cleethorpes and Grimsby than she might expect, because my recently deceased good mother was born and brought up in Lincolnshire. My grandmother moved her family of five daughters around what seems like 25 properties when they were growing up in Cleethorpes and Grimsby. We once went on holiday to visit them all—they are still there.
	The Bill is not intended to deal with private leaseholds. I thought that it was enough to take on council leaseholds. The hon. Lady is right: people think that they are buying the property, but in fact they are buying an interest in the property, which falls short of ownership. If it is a house, they buy the freehold.

Shona McIsaac: Normally.

Simon Hughes: Indeed—they do not always do so. If it is a flat or maisonette, or sometimes a house, they buy a lesser interest—a leasehold. The law calls them tenants: the existing legislation refers to them as qualifying tenants. In ordinary language, people think of them as council leaseholders. The Bill seeks to deal with council leaseholders or leaseholders of social landlords—people who have bought from the Peabody Trust, the Guinness Trust, the Samuel Lewis Trust and so on. Technically, buy-back would occur when someone sold their interest back to the council, which would then give them a 50 per cent. interest. They would end up being a half-owner of the leasehold. The council or the social landlord would be the other half-owner, but it would keep the freehold, so that at the end of 125 years the property would go back to it in theory.
	I understand the worries about other leasehold, but I do not want to open that Pandora's box now, because it is with regard to council leaseholders and social landlord leaseholders that I have experienced the most pressure. I speak as someone who represents more council tenants than, I think, any other English colleague, and that is the issue that people want me to do something about.
	To pick up the point made by the hon. Member for Hendon (Mr. Dismore), I hope that the Minister, even though she does not like the Bill as it is, might be willing to let it go into Committee where we could work together, and what cannot go into the Housing Bill, which is due to return on Report, could be dealt with here in a way that commands cross-party support. I do not seek to do something that does not have cross-party support. I want us to respond to the problems experienced by the hon. Member for Beckenham (Mrs. Lait) in her part of London, the hon. Member for Hendon in his part of London, the hon. Member for Cleethorpes (Shona McIsaac) in the north-east, and my hon. Friends in the south-west. This is not a matter on which the Member of Parliament has a party view; we as Parliament need to get it right.
	I am conscious that there has been much legislation on this issue since the '80s and that aid has been given to councils to help people with funding, which is welcome. I am also conscious that the social sector working party has made recommendations that have been thoroughly considered and were presented last year to Government. I know that others, such as the Joseph Rowntree Foundation, have given good advice. The London leaseholders network has been active, as have the leaseholders forums in my borough. Hon. Members, such as the hon. Member for Regent's Park and Kensington, North (Ms Buck), have made good contributions and commitments in debates, in which colleagues of mine, including my hon. Friends the Member for Hazel Grove (Andrew Stunell) and for Manchester, Withington (Mr. Leech), and the hon. Members for Cities of London and Westminster (Mr. Field) and for Poole (Mr. Syms), and others have participated. I am also conscious that the Department for Communities and Local Government has taken an interest and that the Minister's predecessor, the right hon. Member for Pontefract and Castleford (Yvette Cooper), came forward with some Government proposals recently, two of which are in the Housing Bill that is due to return to the House soon. However, none of those proposals allows buy-back, which we need to get some people out of a financial hole, none of them puts ceilings on bills, and we need that, and none of them gives enough say to people on the process so that they participate in it rather than feel that they are almost passive participants.
	I hope that colleagues will support a Bill that will give leaseholders a much fairer deal, that will respond to their continuing concerns—whether they are young, middle-aged or elderly people who are struggling to pay their bills and still feel that we are not listening— and that the Government will be positive about responding to it. I will work with the Minister and colleagues throughout the House, and I hope that we will be allowed to make progress on an important Bill.

Jacqui Lait: I chair the management company in the leasehold block of flats in which I live, so I have a direct interest in the issue of leasehold. I congratulate the hon. Member for North Southwark and Bermondsey (Simon Hughes) on introducing a Bill that contains many of the thoughts that I have long had on this issue, because, as he acknowledged, I have many public sector leaseholders in my constituency. I also welcome the new Minister for Housing to the Front Bench.
	I welcome what the hon. Gentleman seeks to achieve with the Bill. For a long time, I have been concerned that public sector leaseholders do not have the same rights of consultation as they do in the private sector, for which, my goodness, some of us have fought very hard. The best of councils and other social landlords have brought this form of consultation forward informally, but it has taken an enormous amount of hard work to get them to that stage. I acknowledge the work that my housing association is now doing with our public sector leaseholders, but it is still being done only with the head, not the heart and the head. Therefore, I welcome what the hon. Gentleman is proposing on consultation.
	The hon. Gentleman's idea of a sinking fund is interesting. We have tried in my block of flats to establish a sinking fund. It is a very small block, with people who are used to private sector thinking, and it is proving pretty difficult to get such a fund going. I can see difficulties with it, but, as a form of saving by individual leaseholders, it has its attractions.
	On the buy-back issue, my housing association has offered to buy back on occasions to sort out some leaseholding and tenancy problems. That can happen if the will is there. I suppose that the hon. Gentleman is trying with the Bill to create best practice, and the more we can push councils and housing associations towards best practice, the better. Local arbitration is also a sensible idea.
	I have great sympathy with the drift of the Bill and I hope that it goes into Committee, but there are some major drafting problems. It tends to refer just to council tenants, rather than all tenants. I accept the point that the hon. Member for Cleethorpes (Shona McIsaac) made about the difficulty of the definitions of tenants and leaseholders in law, but I get the impression that the Bill applies to all leaseholders, not just public sector leaseholders, so there are some major flaws, which I assume would be dealt with in Committee. However, the general move and the impulse behind the Bill is a good one, and I commend the hon. Gentleman for bringing it forward.

Christopher Chope: I have a lot of sympathy with parts of the Bill because in the days when I was chairman of housing and then leader of Wandsworth council, I think that we were involved in the sale of more leasehold council flats than any other local authority in the country. We were proud of that. We knew that a problem could be caused in future if those leaseholders did not have agreements that were going to be affordable in the long term. There is no doubt that there are issues here, but I am concerned about the process in relation to the Bill.
	I looked in the weekly bulletin last Saturday to see whether the Bill had been printed and it had not been. I do not think that it was printed until Wednesday or Tuesday. When it was printed, it was printed without any explanatory notes. Frankly, I do not think that it is reasonable that, with that short period of notice, people should be expected to give it a Second Reading on the nod. I would be much more inclined, using terminology that the hon. Member for North Southwark and Bermondsey (Simon Hughes) will understand, to let it go part heard. The issue was commented on in a sense by my hon. Friend the Member for Beckenham (Mrs. Lait). She said that she thought that the Bill should extend to all leaseholds.

Jacqui Lait: No.

Christopher Chope: She does not. I am sorry.

Jacqui Lait: I do not want to hold my hon. Friend up, but I think that the Bill does that, as it is drafted, but it should not.

Christopher Chope: My hon. Friend has obviously been reading the submission from the National Landlords Association, because it thinks that the Bill as drafted does apply to all leasehold properties.

Simon Hughes: indicated dissent.

Christopher Chope: The hon. Gentleman indicates that it does not and obviously I accept that, but unfortunately because of the procedural shortcomings to which I have referred that is not apparent.
	I am also concerned about the position in relation to the bills and cross-subsidies. As the hon. Gentleman said, each of the leasehold properties and the accounts for it must be looked at in isolation. If a scheme is brought in whereby some tenants can defer their payments for substantial periods of time, that will be at someone else's expense. In the private sector, if the lease is worth anything, and most of these leases are worth something, it is possible to get help from a mortgage company. Perhaps in the new climate following the Royal Assent last night to the Northern Rock legislation, it will be possible to get Northern Rock, a state-owned bank, to provide a soft loan, or otherwise, for people who cannot afford their repairs. One can understand why people might want to help those who find it difficult—
	 It being half-past Two o'clock, the debate stood adjourned.
	 Debate to be resumed on Friday 13 June.

Remaining Private Members' Bills

FOOTBALL SPECTATORS AND SPORTS GROUNDS BILL

Order for Second  R eading read.

Hon. Members: Object.
	 To be read a Second time on Friday 25 April.

FORCES WIDOWS' PENSIONS (EQUALITY OF TREATMENT) BILL

Order read for resuming adjourned debate on Question [ 1 February ], That the Bill be now read a Second time.

Hon. Members: Object.
	 Debate to be resumed on Friday  17 October.

GAMING MACHINES

Motion made, and Question proposed, That this House do now adjourn. —[Alison Seabeck.]

Stephen Ladyman: I am grateful for this opportunity to put before the House a matter of particular concern to my constituency. I should begin with an apology to my hon. Friend the Minister. I know from my own experience as a former Minister that for those who draw having to answer the Friday Adjournment debate, it is not usually the highlight of their week; it means cancelling all their engagements with their constituents. I apologise to them and to him, but this is a matter of some importance to people who work in my constituency.
	I rise with a feeling of déjà vu. In 2001, when the Budd report on gambling was published, many of us in this House—on both sides—worked very hard to explain to the Government what we perceived to be its deficiencies. Had it been enacted in the way that Budd proposed, it would have ended the seaside arcade and amusement machine business very quickly. However, through those debates and all that work in the House, in which many of us were closely involved, the Government came to realise that the coin-operated amusement machine industry was very important, that seaside arcades were a very important part of the traditional seaside offering, and that it was therefore necessary to ensure that an accommodation was reached with the industry such that it could survive.
	That accommodation was reached in the end. I do not think that the amusement arcade industry was entirely happy with it, but both it and the Government thought that there was a basis for moving forward and that the industry would survive. Subsequently, the Gambling Act 2005 was passed. Unfortunately, that hopeful attitude has proven not to be well founded. The industry in general is suffering greatly, and I will explain why in a moment.
	The reason why this issue is important to me is, of course, that I have a seaside constituency. It includes the seaside towns of Ramsgate and Broadstairs, in which we have a number of arcades. There are also a number of people in my constituency who provide and maintain these machines, and a company, Harry Levy Amusements, that makes quite a few of them. All those businesses are suffering greatly.
	I have a personal interest, as well, in making sure that the seaside arcade survives. I have very fond memories of spending a few coins in seaside arcades as a child. It was a fun part of going to the seaside—one played on the beach, had some ice cream and went into the arcade. I do not see why the kids of the future should be denied that pleasure.
	How bad is the position? Since September 2007, when the 2005 Act came in, the revenue of adult gaming centres—the part of the seaside arcade where only people aged over 18 can play—has been reduced by 23 per cent. The family entertainment centres that are usually attached to adult gaming centres, and in which anybody can play such machines, have seen a 15 per cent. loss in revenue. Machine suppliers' income has been reduced by 16 per cent., and machine manufacturers' trade has fallen by 55 per cent. on average.
	Let me give as a concrete example to my hon. Friend the experience of Harry Levy Amusements, the company in my constituency that makes some of those machines. Since September, its production has dropped by 40 per cent., and its number of employees is 20 per cent. down for this time of year. Usually, by this time of year, 75 people would be working in the factory. At the moment, it has just 50 people working, so 25 jobs have been lost already. Usually, it would take its orders for the year at the major ATEI trade exhibition in January. This year's orders were 50 per cent. down on last year's, which were 35 per cent. down on the previous year. My hon. Friend will see that the industry has a serious problem.

Anthony D Wright: I congratulate my hon. Friend on securing this timely debate. My constituency, like his, relies heavily during the summer months on family entertainment centres. But it is important to remember the impact not just on family entertainment centres but on the creation of other industry jobs, such as screen printing and manufacturing. Does he believe that that is one of the failures of the Gambling Act, along with the effect on family entertainment centre revenues?

Stephen Ladyman: My hon. Friend is absolutely right, and I congratulate him on his efforts on behalf of his constituents to raise those concerns. A lot of ancillary industries are involved. I have mentioned only Harry Levy Amusements, but that company buys components, parts and services from other surrounding factories, which also experience a knock-on effect.

Julie Kirkbride: The hon. Gentleman makes an important point. I would encourage him to add bingo halls to his list of adult gaming centres and seaside arcades. In my constituency, they have suffered a catastrophic fall in their income for very similar reasons.

Stephen Ladyman: I agree with the hon. Lady. Bingo halls have also been affected by the smoking ban, which I supported and have no objection to, but it has had a further impact on those businesses.
	What has happened to seaside amusement arcades? Before the Gambling Act, they were able to operate what were called section 16 machines, which would allow a £2 stake for a £500 potential prize. They were allowed an unlimited number of those. They were competing, however, with licensed bookmakers' shops, which were allowed to have fixed-odds betting terminals, on which one can gamble as much as £100 on every press of the button for a £500 prize.
	When amusement arcades had a significant number of section 16 machines with a £2 stake and maximum £500 prize, they could compete with bookmakers. Since the Gambling Act was introduced, however, those section 16 machines have been made illegal, and 13,000 have had to be removed from amusement arcades around the country, or upgraded. That involves about £50 million-worth of equipment. Their replacements, known as B3 machines, only allow a £1 stake, and adult gaming centres are only allowed four of them. They now have to compete with bookmakers—which can have four machines that take up to £100 stakes for £500 prizes—with only four machines that can take a £1 stake. The only impact that bookmakers have felt as a result of the Gambling Act is that their fixed-odds betting terminals were renamed B2 machines; otherwise, they have been allowed to carry on doing exactly the same thing as before.
	Faced with a choice of going to an adult gaming centre, where one is limited to a £1 stake, or a bookmaker, where one can potentially gamble £100 a time, people are going to bookmakers in great numbers. Family entertainment centres that were associated with adult gaming centres used to rely on a certain amount of cross-subsidy from the revenue of those adult gaming centres, so family entertainment centres are also suffering.
	In addition, compliance costs have increased under the new Gambling Act. Previously, operators might have been able to comply with the old legislation for as little as £85. They now have to pay £1,000 to comply with the new Act. The owners of some of the arcades in my constituency tell me that their costs have gone up to as much as £3,000 to comply with the Act, so there has been a loss of revenue and increased compliance costs.
	The problem is precisely encapsulated in a letter that Harry Levy Amusements has been prepared to share with me. I shall not use the names of the people involved, but it is a letter that the company recently received from one of its best customers, when he had to cancel his order. It states:
	"With reference to our telephone conversation yesterday—we have experienced a significant downturn in High Street business since September 1st. I would relate this directly to the unfair playing field created by the new legislation with our main competitor the High Street bookmaker. As I am sure you are aware the category B3 machines that have replaced the popular section 16 format are restricted to a £1 stake, whereas the FOBT machines in bookmakers can offer anything up to a £100 stake.
	Also the FOBT machines include B3 games on their programs and as such offer a greater variety for the customer. This leaves adult gaming centres without an individual product to be able to compete. Another contributing factor would be the extended opening hours of the bookmakers from 6pm till 9pm which has reduced our evening trade.
	Sorry to cancel the order."
	With that, Harry Levy lost a significant order and a significant amount of work.
	I have also been contacted by Community, the trade union that represents people who work not only in seaside arcades but in the licensed bookmaker trade. It, too, is worried about the trend and its social consequences. In its view, bookmakers do not monitor the people who play their machines as closely as the seaside industry monitors those using adult gaming centres. Justification for its concern that the Act is having an inadvertent social effect can be found in the 2007 gambling prevalence survey, which found that there was a 2.6 per cent. rate of problem gambling associated with slot machines in seaside amusement arcades—the so-called B3 machines—but that the machines offered in licensed betting offices were associated with an 11.2 per cent. problem gambling rate.
	The Gambling Act, which was intended to prevent the social problems of gambling by preventing people from getting into trouble, has had the perverse effect of destroying good business revenues and pushing people in the direction of a series of machines and an environment that make them more likely to be problem gamblers. Whether one is concerned about the social impact, the traditions of the British seaside or the businesses associated with seaside arcades, the Gambling Act has had that perverse effect, which nobody, neither the industry nor the Government, intended. That clearly needs to be addressed.
	Seaside arcades need a competitive product. I understand that Adjournment debates are not the place for major Government announcements; I hope that my hon. Friend will stand up and say that he will give me everything that I am asking for, but I am not very optimistic. I hope, too, that, in the next few days, he will announce that he is going to conduct a thorough and urgent review of stakes and prizes across the board in this sector. In the meantime, the stake on B3 machines needs to be increased to £2, and the adult gaming centres need to be given the opportunity to have more of them.
	The industry has said that it would like 20 per cent. of the machines in adult gaming centres to be B3 machines with £2 stakes. If my hon. Friend the Minister could announce that in the near future—while the review is going on—it would send a signal to the industry that it has a future, and there is a real possibility that we could turn the problem around.
	My hon. Friend and his colleagues in government have proved that they are prepared to listen and act decisively. They did so on the potential loss of gaming revenue in clubs. They realised that there was going to be a serious problem and introduced so-called B3A machines for clubs to prevent that from occurring. So my hon. Friend and his colleagues have already demonstrated that they are prepared to act decisively when there is evidence of a problem, and I hope that he will agree to act as decisively now in respect of the sector that I have described. If he does, he will forever be known as the saviour of the British seaside, and I promise him that, when he comes to Ramsgate or Broadstairs, there will be an ice cream waiting for him.

Gerry Sutcliffe: I congratulate my hon. Friend the Member for South Thanet (Dr. Ladyman) on securing this important debate. It is good to see lots of hon. Members in the Chamber to discuss this crucial issue, which affects not only the seaside towns but many of our other towns as well. He referred to Ministers being held to account here on a Friday afternoon; I am pleased to be here to talk about this important subject. He has tempted me to make many announcements today, but I hope that he will forgive me if I do not do so. I shall, however, think through the issues that he has raised.
	The Easter holidays will soon be upon us, and they are the traditional curtain-raiser to the season in many seaside towns. Now is therefore an opportune time to reflect on the important role that those towns play in our national life and economy. It is true that many businesses in seaside towns, including the arcades, are having a tough time. Across Government, we are therefore putting in place a range of initiatives to assist the economies of seaside towns and to boost tourism. The then Secretary of State for Culture, Media and Sport, my right hon. Friend the Member for Stalybridge and Hyde (James Purnell), announced a new funding programme for coastal resorts in November last year. That will see £45 million of investment over three years to help regeneration through heritage and culture. A cross-Whitehall working group has been set up to look further at the common issues facing coastal towns and to make sure that our approach is joined up.
	As my hon. Friend the Member for South Thanet has said, seaside arcades form an integral part of many families' seaside holidays or day trips. The penny falls and crane grabs have provided many generations of children—and some adults—with harmless fun, and we want to see that continue. Of course, the arcade sector also encompasses adult gaming centres—AGCs—in the many hundreds of arcades for the over-18s that can be found not only in seaside towns but on many inland high streets.
	I should like to pay tribute to the responsible operators of AGCs and their staff, who have worked hard in recent years to professionalise their operations and improve the sector's image, developing a loyal customer base in the process. It is a matter of concern to me that some in the industry appear to be experiencing difficult trading conditions. We are looking closely at the evidence provided by the British Amusement Catering Trade Association on the extent of the current downturn and what might have caused it. My hon. Friend referred to the range of factors that might be involved. I supported, and continue to support, the smoking ban, because I think that that was the right thing to do. There have been wider technological developments in the gambling industry and there is now more intense competition from other sections of the leisure industry. All those factors might have played a part. Much has been made of the part that the introduction of the Gambling Act 2005 may have played, and I will consider that alongside other possible factors.
	What has perhaps been overlooked in the debate is how we have sought, through the Gambling Act, to help to equip arcades to face some of the new challenges that they face. We have introduced an effective system of regulation for the gaming machine sector, right the way through the supply chain from manufacturers to suppliers to operators. That has ensured that customers can have the confidence and assurance that they are dealing with professional organisations that take consumer protection seriously.
	We have scrapped the prohibition on profit or revenue sharing that was introduced in the Gaming Act 1968. It will take time for the full impact of that change to be felt, but it creates the potential for suppliers to exploit new markets. We have also completely overhauled the rules governing how gaming machines may operate, giving manufacturers new flexibilities in the way in which machines can be developed. For the first time, adult gaming centres have been granted an entitlement in law to up to four high-stake, high-prize gaming machines. I understand the issue around B3 machines, and I am prepared to look at that and have a detailed discussion. We made it clear throughout the passage of the Gambling Act what limits on stakes and prizes would apply under the new legislation, and we made it clear that these machines would not qualify for grandfather rights.
	We want to assist the industry, but our principal objective in regulation is to protect the public, and I make no apologies for that. Even allowing for that overriding priority, the industry has fared well under this Government by any measure.

Anthony D Wright: Does my hon. Friend accept the argument that driving customers away from family entertainment centres has had the effect of sending them into hardened gambling in licensed betting offices? The 2005 Act also made licensed betting offices more open. They are no longer seedy places; they have become open and transparent, so that people can see them and be attracted to the machines. Inevitably, we have driven people away from family entertainment centres and adult gaming centres into more hardened forms of gambling.

Gerry Sutcliffe: I understand my hon. Friend's point. He will be aware of my announcement on Wednesday asking the Gambling Commission to look at fixed-odds betting terminals. We want firmer evidence that what he describes is taking place, but I am happy to meet him to discuss the issue in greater detail.
	The Government think that we have done very well by the gambling industry. In 1995, the maximum stake and prize for what is now a category C machine were 25p and £10 respectively. Had we increased those limits in line with inflation since then, the limits at the end of last year would have been 35p and £14.11 respectively. Instead, they are now 50p and £35. We raised maximum stakes and prizes to those levels in October 2006 in return for a welcome commitment from the industry about social responsibility, a year ahead of the 2005 Act's planned implementation date.
	At the same time, we doubled the maximum stake on what are now category B3 machines to £1. The maximum prize remains £500. Had we raised stake and prize levels in line with inflation since 1995, they would now be 35p and £352.70. We introduced those changes just 16 months ago because many in the industry were finding it tough, yet some in the industry are now asking us to double the maximum stake again on B3 machines to £2, the same amount as category B1 machines, which are permitted only in casinos.

Julie Kirkbride: I should like to be clear about what we are talking about. It is my understanding that before September 2007 bingo clubs and the sort of centres that the hon. Member for South Thanet mentioned were allowed machines with £2 stakes. The day after the Act's implementation, those machines were removed and £1 stake machines were put in. That made a qualitative difference to the kind of gaming that those centres were able to offer their customers, with the result that many customers walked away because the thrill was no longer as good. Surely it is a clear-cut argument: one day they had good business, and the next it had fallen by about 25 per cent. Is that not what we are talking about?

Gerry Sutcliffe: I do not think that it is as clear as that, although I understand the hon. Lady's point. There are exceptional circumstances in bingo, and I hope to return to them in discussions with the bingo industry. She is quite right that we are talking about issues affecting bingo. We are not unsympathetic to the issues raised by adult gaming centres, whether in seaside towns or in urban areas, but we want to ensure that we protect the consumer as well. It is important to strike the right balance.
	I understand the industry's point, as my hon. Friend the Member for Great Yarmouth (Mr. Wright) mentioned, about bookies and fixed-odds betting terminals having caused some of the problem, but it is a bit perverse to argue that we should offer an increased category of gambling in adult gaming centres. If FOBTs are causing the problem, we need to deal with it, and we will consider that.

Stephen Ladyman: I hear what the Minister is saying, but I want to emphasise the point that I made in my speech and pick up the one made by my hon. Friend the Member for Great Yarmouth (Mr. Wright). We know that the rate of problem gambling in adult gaming centres even when the machines had £2 stakes was about 2 per cent. The problem rate in licensed betting offices with those machines is 12 per cent. I am with my hon. Friend the Minister on the matter—I want to protect people from problem gambling, but the way to do so is to encourage them out of the bookmakers' shops and back into adult gaming centres.

Gerry Sutcliffe: I understand my hon. Friend's point. That is why we gave the Gambling Commission the powers that we did. He is right to say that consumer protection is vital. I am not trying to dismiss the argument made by BACTA; hopefully some time next week I shall discuss with BACTA what we might be able to do.
	I acknowledge the problems being experienced in the industry and in communities, which have been highlighted by my hon. Friend today and by an early-day motion that many hon. Members have signed. I recognise that the problems are genuine. In coming up with a solution, as I want to do, I have to get the balance right, so I shall consider what my hon. Friends have said in this debate and the contents of the early-day motion, and continue to work with the industry and the association to make sure that we resolve the problems. I hope that the industry accepts that we have made great strides in the Gambling Act and the way in which the industry has developed. We all want seaside towns to be successful.

Stephen Ladyman: I knew that I would get a sympathetic hearing from my hon. Friend, because he is a sympathetic and fair man. I have every confidence that he will be able to sort out the problems, but I stress the urgency of the situation. We cannot afford to wait for a six-month review, or even a three-month review. My constituents' businesses are going under now. We need to send a signal now.

Gerry Sutcliffe: My hon. Friend will know that BACTA has written to me. I hope to be able to respond to the association's letter next week, as I am aware of the urgency. The industry has made a number of representations to me and I accept that there is a serious problem. However, I hope he accepts that we cannot react indiscriminately. We need to make sure that our response is a measured one.
	I fully understand the concerns relating to gaming machines and bingo. We have a long tradition of bingo in this country and we do not want to do anything to damage it further. We want to support the gaming industry and bingo, and I hope that in the next few weeks we will be able to make some positive announcements.
	 Question put and agreed to.
	 Adjourned accordingly at three minutes to Three o'clock.